ENGR 3970/ET 5970 Project Assignment – Fall 2019

This project involves data collection & analysis which should be fun and enables you to use your knowledge
from class for practical application. This project will help illustrate the principle that “you learn by doing”
and will help you link Engineering Economics knowledge to real life planning for your life following
graduation.
Project description: We all know that we cannot plan for every possible event in our future. However, for
the purpose of this project you are going to develop an experimental plan for the first 10 years of your life
following graduation. How things really happen in the future may or may not work out as planned, but at
least you can think about this as an interesting real-world application of Engineering Economy. The first part
of the project involves simply documenting year by year events that you think have a reasonable probability
of occurrence in your life. For example, at year 0 (immediately following graduation), perhaps you will
enter the engineering workforce or maybe you are thinking of delaying entry into the engineering workforce
by a few years to join the Peace Corps. Are you thinking of additional graduate school later while working?
Many engineers decide to obtain additional education in their field or at least attend short courses in
particular areas from time to time to stay current. Do you plan to buy a house? How often will you buy a
car? What about a car for the kids? What about a vacation home or a boat? How many children will you
have and when? Do you anticipate caring for an elderly relative? There are many, many questions to think
about over the next 10 years. You can be creative – this is not meant to be a hard and fast plan. For the
purpose of financial calculations, you need to be as realistic as possible. Estimates of salary increases,
including big jumps when completing additional education can be obtained from the library and the internet.
Additional requirements: Each project must be neatly typed and include a cover sheet that at a minimum
contains your name and the project assignment. The ability to communicate is a very important part of the
project. Your report should include a concise and clear definition of all events in your project on a year by
year basis over 10 years. One paragraph per year should be sufficient to provide this information. You
should include a short bibliography with references. You should also list and briefly describe assumptions
you have made for interest rates, tax, regular raises, etc. Use MS Excel for financial data organization, year
by year, and of course, for the computations. After all the data has been entered, you will need to compute
net present value (NPV) for your plan and discuss what conclusion(s) you have reached as a result of the
exercise. For the purpose of this project, use Total cash flow:
Xo = (G-C) – (G-C-Dt)T – K + L
Xo = After tax total cash flow; G = Gross income; C = Costs of goods sold; Dt = Tax depreciation; T = Tax
rate; K = Capital investment (Total Out of Pocket Spending for Purchasing Capital such as Cars, Houses, etc.
; L = Salvage value
The money you earn from your planned job(s) or investments will be treated as your expected gross revenues
(G). Other expenses treated as Cost (C).
Assume you liquidate all your assets at the end of 10 years for the purposes of calculating your NPV.
See the project assignment evaluation criteria for further requirements.
Please submit your project assignment electronically in D2L.
This should be a fun project that allows you to use your knowledge from class for practical application
in your life!
You are required to work individually on this project assignment.
Late projects will receive a grade of zero if not received within listed due date & time. There is no makeup
for missed projects.
Recommendation – start early.

 

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