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Breakeven and Sensitivity Analysis Guide

This document provides an overview of Week 8 for the course EMT320: Foundations of Engineering Economy. The weekly objectives are to determine breakeven values for projects and alternatives, evaluate sensitivity to parameter estimates, calculate payback periods with cautions, and use spreadsheets for sensitivity and breakeven analysis. Assigned reading is Chapter 8 and lecture videos. Activities include participating in a discussion on sensitivity and breakeven and completing the final exam.

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Grantham University
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255 views1 page

Breakeven and Sensitivity Analysis Guide

This document provides an overview of Week 8 for the course EMT320: Foundations of Engineering Economy. The weekly objectives are to determine breakeven values for projects and alternatives, evaluate sensitivity to parameter estimates, calculate payback periods with cautions, and use spreadsheets for sensitivity and breakeven analysis. Assigned reading is Chapter 8 and lecture videos. Activities include participating in a discussion on sensitivity and breakeven and completing the final exam.

Uploaded by

Grantham University
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

EMT320: Foundations of Engineering Economy

WEEKLY OVERVIEW: Week 8


Week 8: Breakeven, Sensitivity, and Payback Analysis

Course Objectives:

Evaluate the impact of estimation using techniques like breakeven, sensitivity, or payback j
analysis
Perform replacement or retention analysis of an asset

Weekly Objectives:

Determine the breakeven value for a single project.


Calculate the breakeven value between alternatives and use it to select one alternative
Evaluate the sensitivity of one or more parameters to variation in the estimates.
Calculate the payback period for a project at i= 0% and I > and state the cautions on using
payback analysis
Evaluate the sensitivity of mutually exclusive alternative selection to variation in estimates
Use a spreadsheet to perform sensitivity and breakeven analysis

Assigned Reading:
1. Chapter 8 in your textbook
2. View W8 Lecture
3. View W8 Video Lectures
Activities
1. Participate in the W8 discussion Sensitivity and its impact on breakeven
2. Complete Final Exam

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