ES 181 Engineering Economy - Chapter 9
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Questions and Answers

What is considered a defining characteristic of a project?

  • It is a temporary effort with a defined beginning and end. (correct)
  • It is always managed by a single individual.
  • It can be executed without a budget.
  • It involves continuous operations.

    • Which type of feasibility assesses the potential market for a product or service?

  • Technical feasibility
  • Financial feasibility
  • Socio-economic feasibility
  • Market feasibility (correct)

    • In terms of feasibility studies, what does socio-economic feasibility encompass?

  • The management structure of the project team.
  • The technical requirements of project execution.
  • The financial benefits of a project.
  • The project's impact on the community and economy. (correct)

    • What is the primary purpose of a project summary in feasibility studies?

    <p>To provide a brief overview and objectives of the project.</p> Signup and view all the answers

    What differentiates a project from routine operations?

    <p>Projects have a specific goal and conclusion once achieved.</p> Signup and view all the answers

    Which component is NOT typically included in a feasibility study?

    <p>Personal preferences of the project manager</p> Signup and view all the answers

    What role does marketing play in business success according to the content?

    <p>It serves as a direct interface between customers and products.</p> Signup and view all the answers

    When preparing a feasibility study, which of the following analyses is NOT typically included?

    <p>Personal assessment of the team members</p> Signup and view all the answers

    What is the purpose of a preliminary analysis in project planning?

    <p>To evaluate potential profitability.</p> Signup and view all the answers

    Which of the following is NOT a component of preparing a market survey?

    <p>Designing promotional materials.</p> Signup and view all the answers

    What should be included in the project outline of a preliminary analysis?

    <p>Target markets and needs to be fulfilled.</p> Signup and view all the answers

    What is the main outcome assessed in a projected income statement?

    <p>Projected net income compared to costs.</p> Signup and view all the answers

    Which barrier should be examined during the investigation of accessibility?

    <p>Production costs exceeding projected revenues.</p> Signup and view all the answers

    What aspect should be considered when conducting a market survey regarding competition?

    <p>The location of competitors.</p> Signup and view all the answers

    If the preliminary analysis indicates a negative outlook, what should be the next step?

    <p>Reassess project viability and expectations.</p> Signup and view all the answers

    What is one outcome of successfully conducting a market survey?

    <p>A realistic estimate of revenue potential.</p> Signup and view all the answers

    Which of the following components is NOT typically considered in a financial feasibility study?

    <p>Market share analysis</p> Signup and view all the answers

    What is one primary goal of a financial feasibility study?

    <p>To determine the need for capital to start and operate a business</p> Signup and view all the answers

    When might a company primarily benefit from conducting a financial feasibility study?

    <p>When raising substantial amounts of capital</p> Signup and view all the answers

    What does ROI stand for in the context of financial feasibility studies?

    <p>Return on investment</p> Signup and view all the answers

    Which one of the following is a potential benefit of writing a feasibility study?

    <p>Provides insights into market opportunities</p> Signup and view all the answers

    What is essential for a bank or investor when considering funding a project?

    <p>A detailed financial report or feasibility study</p> Signup and view all the answers

    What type of study often contains less detail compared to a financial feasibility study?

    <p>Business plan with a cost-benefit analysis</p> Signup and view all the answers

    One of the essential aspects to include in a financial report is the assessment of?

    <p>Amount of required capital for operations</p> Signup and view all the answers

    What should a business plan outline regarding ongoing operations?

    <p>Marketing and merchandising</p> Signup and view all the answers

    Which of the following is considered a required asset on a day-one balance sheet?

    <p>Initial cash and financing capital</p> Signup and view all the answers

    What is the main purpose of conducting a final review in project planning?

    <p>To assess project feasibility</p> Signup and view all the answers

    What does a financial feasibility study primarily determine?

    <p>The cash flow required to complete a project</p> Signup and view all the answers

    What pivotal component does a cost-benefit analysis in a financial feasibility study address?

    <p>Economic life of the project</p> Signup and view all the answers

    Which of the following indicates a high likelihood of project success?

    <p>Positive ROI and growth potential</p> Signup and view all the answers

    Which of the following is NOT part of a business plan's operational planning?

    <p>Executive team bios</p> Signup and view all the answers

    What should be included in the organizational chart of a business plan?

    <p>Assigned roles and hierarchies</p> Signup and view all the answers

    How should the appendices be labeled if there are more than 26 appendices?

    <p>Use double letters like AA, BB, CC.</p> Signup and view all the answers

    What format should the title and label of each appendix have on the page?

    <p>Centered, bold, in normal capitalization.</p> Signup and view all the answers

    How should the first paragraph of the appendix be formatted?

    <p>It should be flush left and not indented.</p> Signup and view all the answers

    What is the correct way to number tables and figures in the appendices?

    <p>Append the letter of the appendix to their number.</p> Signup and view all the answers

    What must be done when citing outside sources within an appendix?

    <p>Include citations inline and reference in the main list.</p> Signup and view all the answers

    What type of information is typically included in an appendix?

    <p>Information too detailed for the main text</p> Signup and view all the answers

    Which of the following is NOT a rule for appendices?

    <p>Appendices should contain all information needed for the paper</p> Signup and view all the answers

    Where should appendices appear in a paper according to APA style?

    <p>Following the tables section</p> Signup and view all the answers

    How should each appendix be referred to within the text?

    <p>In bold font with the specific appendix number</p> Signup and view all the answers

    Which of the following is a correct example of content suitable for an appendix?

    <p>Detailed demographic details of studied subpopulations</p> Signup and view all the answers

    What is the purpose of including appendices in a paper?

    <p>To present detailed information that might distract the reader</p> Signup and view all the answers

    What is the correct format for titling an appendix?

    <p>Appendix with a capital letter followed by the number or letter</p> Signup and view all the answers

    Why should lengthy lists not be included in the main text?

    <p>They can contribute to a lack of clarity in the main arguments.</p> Signup and view all the answers

    Study Notes

    ES 181 Engineering Economy - Chapter 9

    • Chapter 9 covers the preparation of international standard feasibility studies, both manually and using software that adopts the IAS (presumably International Accounting Standards).
    • The course plan for week 15 (6 hours) details topics related to preparing feasibility studies, using software, and adopting IAS.
    • Topics include project summary, market feasibility, technical feasibility, financial feasibility, socio-economic feasibility, management feasibility, and appendices.
    • Assessment tools include a quiz, course manual, PPT presentations, activities, and assignments.

    Project (or Program)

    • A project is any undertaking, completed individually or collaboratively, often involving research or design.
    • It's carefully planned, typically by a project manager or project team, to achieve a specific goal.
    • Projects are temporary endeavors, having a beginning and an end.
    • They require a team, budget, schedule, and set of expectations to be met.
    • Projects differ from ongoing organizational activities, concluding once their goals are met.

    Project Summary

    • A project summary is a project management tool.
    • It summarizes a project's status at a specific point in time.
    • It's concise and comprehensive, providing an overview of key project details.
    • Internal summaries are used for project progress updates and communication among team members, managers, contractors, and other relevant parties.
    • External summaries act as project briefs and help readers quickly grasp the project's nature, status, and overall context.
    • Summarily, project summaries include basic information (project name, ID, phase, launch date, current date), key project team members, and details of the project's current phase and status.

    Market Feasibility

    • Marketing is essential to business success.
    • Sales form a direct interface between customers and products offered by companies.
    • Marketing acts as an indirect function connecting customers and companies.
    • A market is a place where parties gather to facilitate the exchange of goods and services.
    • Market feasibility studies help identify market competition, potential markets, and overall market analysis to assess a business idea.
    • These studies are beneficial for individuals seeking to start a business.
    • Target market refers to a group of customers towards whom a business directs its marketing efforts and merchandise.
    • Market segmentation allows businesses to effectively target diverse consumer groups, each perceiving products and services differently.

    Technical Feasibility

    • Technical feasibility assesses the organization's technical capabilities and resources.
    • It determines if technical resources meet the capacity for converting ideas into practical systems.
    • Evaluation of hardware, software, and other technical requirements is crucial for a project.
    • A technical feasibility study (TFS) provides a broad overview of project aspects.
    • It assists with planning, troubleshooting, and tracking project progress.

    Financial Feasibility

    • Financial feasibility (FFS) determines if a project is potentially profitable.
    • It involves financial and scenario analyses, and an investment appraisal.
    • A cost-benefit analysis (CBA) through the entire project life cycle is included to determine profitability.
    • It evaluates the viability of a project based on major components, such as the project's ability to generate enough cash to complete the project and make a profit.
    • The bottom line for any business is sustainability, paying employees, and creating profit.
    • Financial studies help assess these elements.

    Socio-Economic Feasibility

    • Socio-economic studies examine a project's contributions to the government and society.
    • It demonstrates that business aims beyond profit, including the improvement of people's welfare.
    • Socio-economics (social economics) studies how economic activities are shaped by and impact social processes.
    • It analyzes societies by examining social, cultural, and economic attributes of the region or group under focus.

    Management Feasibility

    • Management feasibility assesses the objective and logical way to uncover strengths and weaknesses (also opportunities and threats) of an existing or proposed business venture.
    • It also identifies the resources required for the project to be successful and helps answer the question of "should we proceed?" with the proposed project idea.
    • A study of management feasibility contains two judging criteria: cost required and value to be attained.
    • Four steps in a managerial feasibility method: Examine the market, Review technical requirements, Explore the business model, and Look for an escape route.

    Appendices

    • Appendices contain information too detailed for the main report, such as lengthy mathematical derivations, technical drawings, or raw data tables.
    • Contents of appendices are summarized and referenced in the main body of the report.
    • Each appendix has a label/number and title. All appendices are compiled together at the end of the document.

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    ES 181 Engineering Economy Chapter 9 PDF

    Description

    Chapter 9 focuses on preparing international standard feasibility studies using software and manual methods in line with IAS. Key topics include project feasibility in various aspects such as market, technical, financial, and socio-economic considerations. This chapter provides essential knowledge for conducting thorough evaluations of project viability.

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