IEOR E4003
Fall 2010: Industrial Economics


Instructor Information:
Soulaymane Kachani
Office Address: Mudd Building Room 334
Telephone Number: 854-1804

Course Texts:
Required text:

  • Custom book (two volumes) from Wiley & Sons: S. Kachani, Corporate/Industrial Economics for Columbia University. 3rd Edition. ISBN:978-0470929193. This book can only be purchased at the Columbia University bookstore ( or ordered through the Columbia bookstore website (choose Fall 2010, IEOR department and E4003 course).

  • Optional Texts:
  • R. Brealey and S. Myers, Principles of Corporate Finance, Irwin/McGraw-Hill.
  • A. K. Dixit and R. S. Pyndyck, Investments Under Uncertainty, Princeton University Press.

  • Course Description:
    This course will discuss how to allocate capital to projects within a firm in order to maximize the value of the firm to its shareholders.
    We describe how an investment project can be characterized by its cash flow profile, i.e., the amount and timing of costs and benefits of this project in the planning horizon.
    We show how firms should take into account the cost of capital, budgets, taxes, depreciation, inflation, and uncertainty, in order to decide which projects to undertake, reject, or postpone.
    Students can take only one of IEOR E4003 and IEOR E4403, but not both.

    Method of Evaluation:
    Participation (10%), Assignments (25%), Midterm (30%) and Final (35%).  
    The exams are closed text and closed notes. You can bring one (1) one-sided 8.5" by 11" sheet with formulas and a calculator to the exams. All examinations and written homework are subject to the usual standards of academic honesty as described in the University's Student Handbook.