Appropriate financial decisions are important for success of any company. Sometimes, erroneous selection of project or...

 

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Appropriate financial decisions are important for success of any company. Sometimes, erroneous selection of project or investment ruins the overall company's financial condition. There are number of financial or engineering economic tools available but the appropriateness of a given project, estimate its value, and justify it from an engineering economics standpoint is the key. It's known that engineering economics provides the tools and techniques in evaluating alternatives economically and source of many engineering decisions are based on engineering economics. Under the principles of engineering economy, the 7-step systematic principles of engineering economic analysis technique is given as: i. Identify the investment alternatives. ii. Define the planning horizon. iii. Specify the discount rate. iv. Estimate the cash flows. v. Compare the alternatives. vi. Perform supplementary analyses. vii. Select the preferred investment. Explain in detail how the principles above are involved in the decision on engineering economics and provide example of its application. (30 marks) Appropriate financial decisions are important for success of any company. Sometimes, erroneous selection of project or investment ruins the overall company's financial condition. There are number of financial or engineering economic tools available but the appropriateness of a given project, estimate its value, and justify it from an engineering economics standpoint is the key. It's known that engineering economics provides the tools and techniques in evaluating alternatives economically and source of many engineering decisions are based on engineering economics. Under the principles of engineering economy, the 7-step systematic principles of engineering economic analysis technique is given as: i. Identify the investment alternatives. ii. Define the planning horizon. iii. Specify the discount rate. iv. Estimate the cash flows. v. Compare the alternatives. vi. Perform supplementary analyses. vii. Select the preferred investment. Explain in detail how the principles above are involved in the decision on engineering economics and provide example of its application. (30 marks)

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Decisions decisions Running an organization must involve taking thousands of decisions a day as you can imagine The decisions that have to be taken with respect to the capital structure are known as F... View the full answer