Engineering Economic Decisions

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Questions and Answers

What was a difficulty faced by the owners of the business as it grew?

Finding a suitable partnership

Managing a large workforce

Raising capital for business expansion (correct)

Choosing a business location

In Ghana, a private company is owned by more than 50 people.

False

What is the term for a company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested?

Limited Liability Company (LLC)

The business registration in Ghana is now done by the Office of the ______

Registrar of Companies Signup and view all the answers

Match the following business types with their characteristics

Sole Proprietorship = One owner External Company = Registered outside Ghana Private Company = 1-50 owners, limited liability Public Company = More than 50 owners, limited liability Signup and view all the answers

In Ghana, the quantity of business transacted by corporations is several times less than that of proprietorships and partnerships.

False Signup and view all the answers

What are the five categories of business registration in Ghana?

Sole Proprietorship, External Company, Private Company, Public Company, Limited Liability Company Signup and view all the answers

In what year was the business registration Act passed in Ghana?

2019 Signup and view all the answers

What is the value of Microsoft Corporation in USD?

USD 3.05 trillion Signup and view all the answers

The final examination is worth 40% of the assessment.

False Signup and view all the answers

What is the name of the authors of the book "Principles of Engineering Economic Analysis"?

E. & Pratt, D.B. Signup and view all the answers

John Deere is a leading _______________________ company valued at USD 112.85 billion.

agro-equipment or “agricultural engineering” Signup and view all the answers

Match the following companies with their corresponding engineering fields:

Microsoft Corporation = computer engineering John Deere = agricultural engineering Cargill = food processing engineering Johnson & Johnson = biomedical engineering 3M = materials engineering Signup and view all the answers

How many hours of regular lectures are scheduled per week?

2 hours Signup and view all the answers

The mid-semester exam is worth 60% of the assessment.

False Signup and view all the answers

What is the name of the authors of the book "Engineering Economy"?

Sullivan, W.G., Wicks, E.M., & Koelling, C.P. Signup and view all the answers

What is net worth?

The difference between your assets and liabilities Signup and view all the answers

The fiscal year of a company is always from January 1 to December 31.

False Signup and view all the answers

What are the primary responsibilities of engineers in business?

Planning for the acquisition of equipment (capital expenditure) that will enable the firm to design and produce products economically. Signup and view all the answers

The answer to the question 'What is the company's financial position at the end of the fiscal period?' is provided by the ______________________ statement.

balance sheet Signup and view all the answers

What is the purpose of financial statements?

To provide information about a company's financial position and performance Signup and view all the answers

Match the financial statement with the question it answers:

Balance Sheet = What is the company's financial position at the end of the fiscal period? Income Statement = How well did the company operate during the fiscal period? Statement of Retained Earnings = On what did the company decide to use its profits? Cash Flow Statement = How much cash did the company generate and spend during the fiscal period? Signup and view all the answers

Dell Inc.'s accounting period begins on January 1 and ends on December 31 of the same year.

False Signup and view all the answers

What is the purpose of the statement of retained earnings?

To show how the company decided to use its profits. Signup and view all the answers

What is the primary reason engineers need to understand financial statements?

To communicate with upper management regarding project profitability Signup and view all the answers

The Balance Sheet answers the question: What is the company's financial position at the beginning of the reporting period?

False Signup and view all the answers

What was Dell's revenue in 2005?

49.205 billion Signup and view all the answers

Michael Dell started his IBM computer in his room at the ______________ of Texas in 1984.

University Signup and view all the answers

What percentage of the global market share of personal computer sales did Dell reach in 2005?

17.8% Signup and view all the answers

Dell Corporation was the world's number-two supplier of personal computer systems in 2005.

False Signup and view all the answers

Match the following financial statements with their descriptions:

Balance Sheet = Answers the question: What is the company's financial position at the end of the reporting period? Income Statement = Answers the question: What is the company's revenue and expenses over a specific period of time? Signup and view all the answers

What is the purpose of presenting earnings per share (EPS) in the income statement?

To relate earnings to what shareholders paid for a share of stock Signup and view all the answers

The income taxes are calculated from the net income.

True Signup and view all the answers

What is another term for net income?

accounting income Signup and view all the answers

Earnings per share (EPS) is generally considered to be the single most important variable in determining a share's __________.

price Signup and view all the answers

What is an example of an operating expense?

Leasing machinery or equipment Signup and view all the answers

Match the following components of the income statement with their descriptions:

Operating expenses = Expenses associated with paying interest, leasing machinery or equipment, selling, staff wages and administration Earnings per Share (EPS) = Earnings per share of stock Income taxes = Taxes calculated from the taxable income Net income = Accounting income or profit Signup and view all the answers

Study Notes

Introduction to Engineering Economic Decisions

Engineering economic decisions are made in various businesses, including tech, agricultural, food processing, biomedical, and materials engineering companies.
Examples of companies in these industries include Microsoft Corporation, John Deere, Cargill, Johnson & Johnson, and 3M.
These companies have significant valuations, with Microsoft Corporation valued at USD 3.05 trillion, John Deere at USD 112.85 billion, and Johnson & Johnson at USD 358.47 billion.

Types of Business Organization

Businesses can be organized in different forms, including sole proprietorships, partnerships, and corporations.
In Ghana, the Office of the Registrar of Companies registers businesses, which can be categorized into five groupings: sole proprietorship, external company, private/public companies limited by guarantee, private/public companies limited/unlimited by shares, and Limited Liability Company (LLC).
Hybrids of business types can also exist, with various conditions.

Financial Management and Analysis

Financial statements are used to provide information about a company's financial position and performance.
Four basic financial statements are used to answer questions about a company's financial position, operations, profits, and cash flow.
These statements include the balance sheet, income statement, statement of retained earnings, and cash flow statement.
The balance sheet provides information about a company's financial position at the end of the fiscal period.
The income statement provides information about a company's operations during the fiscal period.
The statement of retained earnings provides information about how a company uses its profits.
The cash flow statement provides information about a company's cash inflows and outflows during the fiscal period.

Financial Statements – Overview

Financial statements are used to communicate with stakeholders, including investors and creditors.
Engineers in business need to understand financial statements to make informed decisions about projects and investments.
Financial statements are prepared according to a company's accounting period or fiscal year, which can be any 12-month period.

Financial Statements – The Balance Sheet

The balance sheet provides information about a company's financial position at the end of the reporting period.
The balance sheet is used to answer the question: "What is the company's financial position at the end of the fiscal period?"

Financial Statements – The Income Statement

The income statement provides information about a company's operations during the fiscal period.
Typical components of the income statement include operating expenses, interest expenses, income taxes, and net income.
Earnings per Share (EPS) is another important component of the income statement, which provides information about a company's profitability from the shareholders' perspective.
EPS is calculated by dividing the net income by the total number of shares outstanding.

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Learn about engineering economic decisions made in various industries, including tech, agricultural, and biomedical companies, and their significant valuations.

Engineering Economic Decisions

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Questions and Answers

What was a difficulty faced by the owners of the business as it grew?

In Ghana, a private company is owned by more than 50 people.

What is the term for a company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested?

The business registration in Ghana is now done by the Office of the ______

Match the following business types with their characteristics

In Ghana, the quantity of business transacted by corporations is several times less than that of proprietorships and partnerships.

What are the five categories of business registration in Ghana?

In what year was the business registration Act passed in Ghana?

What is the value of Microsoft Corporation in USD?

The final examination is worth 40% of the assessment.

What is the name of the authors of the book "Principles of Engineering Economic Analysis"?

John Deere is a leading _______________________ company valued at USD 112.85 billion.

Match the following companies with their corresponding engineering fields:

How many hours of regular lectures are scheduled per week?

The mid-semester exam is worth 60% of the assessment.

What is the name of the authors of the book "Engineering Economy"?

What is net worth?

The fiscal year of a company is always from January 1 to December 31.

What are the primary responsibilities of engineers in business?

The answer to the question 'What is the company's financial position at the end of the fiscal period?' is provided by the ______________________ statement.

What is the purpose of financial statements?

Match the financial statement with the question it answers:

Dell Inc.'s accounting period begins on January 1 and ends on December 31 of the same year.

What is the purpose of the statement of retained earnings?

What is the primary reason engineers need to understand financial statements?

The Balance Sheet answers the question: What is the company's financial position at the beginning of the reporting period?

What was Dell's revenue in 2005?

Michael Dell started his IBM computer in his room at the ______________ of Texas in 1984.

What percentage of the global market share of personal computer sales did Dell reach in 2005?

Dell Corporation was the world's number-two supplier of personal computer systems in 2005.

Match the following financial statements with their descriptions:

What is the purpose of presenting earnings per share (EPS) in the income statement?

The income taxes are calculated from the net income.

What is another term for net income?

Earnings per share (EPS) is generally considered to be the single most important variable in determining a share's __________.

What is an example of an operating expense?

Match the following components of the income statement with their descriptions:

Study Notes

Introduction to Engineering Economic Decisions

Types of Business Organization

Financial Management and Analysis

Financial Statements – Overview

Financial Statements – The Balance Sheet

Financial Statements – The Income Statement

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