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Courses » Depreciation, alternate investment and profitability analysis

Depreciation, alternate investment and profitability analysis

ABOUT THE COURSE

In the  analysis of costs and profits for business operation the cost of  physical assets decrease in value with age due to physical deterioration, technological advances, changes in  economic environment, or other similar factors which ultimately will cause retirement of the property. The reduction in value of the physical assets due to any of the above causes is a measure of the depreciation. In the present MOOC different depreciation methods such as: St. line method, Declining balance method, Double-declining balance method, Sum-of-the-digits method, : Sinking fund method & Repair provision method, Accelerated cost recovery method –I&II are discussed. 

The common problem confronted in engineering economics are  those where alternative comparison  between two or more mutually exclusive alternative investments compete  involving different series of Capital disbursement. The present module demonstrates how to apply the profitability measures to select the best alternative out of a set of mutually exclusive alternatives properly. The module contains different methods such as: Annual Cost method, Present Worth  Method, Perpetuity  Method, Rate of Return Method, Incremental Rate of return Method and Minimum Return as a cost Method.

Resources required to carry out a project are often less than that available for it. Hence, all investments must be carried out carefully and should be evaluated towards its economic feasibility based on some profitability standards. A number of methods such as : Payback period, Return on investment, Net Return, Discounted cash flow-I & II are employed for computation of profitability in the economic analyses and are presented in this MOOC.

INTENDED AUDIENCE 

It is a core course for UG.

PRE-REQUISITES


Knowledge of time value of money concept is required.Knowledge of general mathematics and practice on MS Excel software are desirable.

INDUSTRIES THAT WILL RECOGNIZE THIS COURSE

All manufacturing industry where financial decisions are taken.



COURSE INSTRUCTOR



Dr.Bikash Mohanty is a professor in Chemical engineering department at Indian institute of technology Roorkee. He has developed and taught the course “Chemical Engineering plant design and economics” for  more than a decade to chemical engineers. He has also developed a course on “Chemical Engineering Plant Design and Economics” for the project “National Mission Project on Education through ICT-developing pedagogical methods for various classes, intellectual calibres and research in e-learning” executed by IIT Kharagpur.


COURSE PLAN


Week1: Introduction to course, depreciation: St. line method, Declining balance method, Double-declining balance method, Sum-of-the-digits method. Along with the above two   tutorials will be conducted.

Week 2: Sinking fund method & Repair provision method, Accelerated cost recovery method –I&II, Introduction to alternate investment: Annual cost method. Along with the above two tutorials will be conducted.

Week 3: Present worth method, Rate of return method, Incremental rate of return , Perpetuity method, Minimum return as cost. Along with the above two tutorials will be conducted.

Week 4: Introduction to profitability analysis and Payback period, Return on investment, Net Return, Discounted cash flow-I & II. Along with the above two tutorials will be conducted.

CERTIFICATION EXAM

The exam is optional for a fee. Exams will be on 26 March 2017.

Time: Shift 1: 09am - 12noon
          Shift 2: 02pm - 05pm

Any one shift can be chosen to write the exam for a course.
Registration url: Announcements will be made when the registration form is open for registrations.
The online registration form has to be filled and the certification exam fee needs to be paid. More details will be made available when the exam registration form is published.

CERTIFICATION 

Final score will be calculated as : 25% assignment score + 75% final exam score
25% assignment score is calculated as 25% of average of 
4 weeks course: Best 3 out of 4 assignments
E-Certificate will be given to those who register and write the exam and score greater than or equal to 40% final score. Certificate will have your name, photograph and the   score in the final exam with the breakup.It will have the logos of NPTEL and IIT Roorkee. It will be e-verifiable at nptel.ac.in/noc.