Civil Engineering Financial Management
Assignment 2 (Project) Answers
Year 2025
0027 63 985 5033
1
,TABLE OF CONTENTS
1.0 INTRODUCTION............................................................................................................. 4
2.0 THEORY AND CALCULATIONS .................................................................................... 5
3.0 CONCLUSION .............................................................................................................. 10
4.0 REFERENCES ............................................................................................................. 11
2
,PREVIEW
𝑃𝑊𝑋 = −$45 000 − $8 000(𝑃/𝐴, 12%, 5) + $2 000(𝑃/𝐹, 12%, 5)
(1 + 0.12)5 − 1
(𝑃/𝐴, 12%, 5) = = 3.6048
0.12(1 + 0.12)5
1
(𝑃/𝐹, 12%, 5) = = 0.5674
(1 + 0.12)5
𝑃𝑊𝑋 = −$45 000 − $8 000(3.6048) + $2 000(0.5674)
𝑃𝑊𝑋 = −$72 703.60
𝑃𝑊𝑌 = −$58 000 − $4 000(𝑃/𝐴, 12%, 5) + $12 000(𝑃/𝐹, 12%, 5)
𝑃𝑊𝑌 = −$58 000 − $4 000(3.6048) + $12 000(0.5674)
𝑃𝑊𝑌 = −$65 610.40
Alternative Y is selected since it has the numerically largest PW value.
3
, 1.0 INTRODUCTION
Financial management is the business function concerned with profitability, expenses, cash
and credit. These are often grouped together under the rubric of maximizing the value of the
firm for stockholders. The discipline is then tasked with the "efficient acquisition and
deployment" of both short- and long-term financial resources, to ensure the objectives of the
enterprise are achieved.1
Engineering economics is one of the most practical subject matters in the engineer ing
curriculum, but it is an always challenging, ever-changing discipline.2 Engineering economy
involves formulating, estimating, and evaluating the expected economic outcomes of
alternatives designed to accomplish a defined purpose. Mathematical techniques simplify the
economic evaluation of alternatives.3
The need for engineering economy is primarily motivated by the work that engineers do in
performing analyses, synthesizing, and coming to a conclusion as they work on projects of all
sizes. In other words, engineering economy is at the heart of making decisions. These
decisions involve the fundamental elements of cash flows of money, time, and interest rates.
This chapter introduces the basic concepts and terminology necessary for an engineer to
combine these three essential elements in organized, mathematically correct ways to solve
problems that will lead to better decisions.4
Nearly all engineering problems involve considerations and comparisons of cost. Arthur M.
Wellington’s classic remark made nearly fifty years ago that engineering was the art of doing
well for one dollar what any bungler could do for two dollars, was his striking way of
emphasizing this fact.5
1 https://kfknowledgebank.kaplan.co.uk/financial-management
2 Fundamentals of Engineering Economics Fourth Edition, Global Edition, 2020
3 Leland Blank; Anthony Tarquin, 1976. Engineering Economy
4 Leland Blank; Anthony Tarquin, 1976. Engineering Economy
5 Eugene. L. Grant, 1930. Principles of Engineering Economy
4
Assignment 2 (Project) Answers
Year 2025
0027 63 985 5033
1
,TABLE OF CONTENTS
1.0 INTRODUCTION............................................................................................................. 4
2.0 THEORY AND CALCULATIONS .................................................................................... 5
3.0 CONCLUSION .............................................................................................................. 10
4.0 REFERENCES ............................................................................................................. 11
2
,PREVIEW
𝑃𝑊𝑋 = −$45 000 − $8 000(𝑃/𝐴, 12%, 5) + $2 000(𝑃/𝐹, 12%, 5)
(1 + 0.12)5 − 1
(𝑃/𝐴, 12%, 5) = = 3.6048
0.12(1 + 0.12)5
1
(𝑃/𝐹, 12%, 5) = = 0.5674
(1 + 0.12)5
𝑃𝑊𝑋 = −$45 000 − $8 000(3.6048) + $2 000(0.5674)
𝑃𝑊𝑋 = −$72 703.60
𝑃𝑊𝑌 = −$58 000 − $4 000(𝑃/𝐴, 12%, 5) + $12 000(𝑃/𝐹, 12%, 5)
𝑃𝑊𝑌 = −$58 000 − $4 000(3.6048) + $12 000(0.5674)
𝑃𝑊𝑌 = −$65 610.40
Alternative Y is selected since it has the numerically largest PW value.
3
, 1.0 INTRODUCTION
Financial management is the business function concerned with profitability, expenses, cash
and credit. These are often grouped together under the rubric of maximizing the value of the
firm for stockholders. The discipline is then tasked with the "efficient acquisition and
deployment" of both short- and long-term financial resources, to ensure the objectives of the
enterprise are achieved.1
Engineering economics is one of the most practical subject matters in the engineer ing
curriculum, but it is an always challenging, ever-changing discipline.2 Engineering economy
involves formulating, estimating, and evaluating the expected economic outcomes of
alternatives designed to accomplish a defined purpose. Mathematical techniques simplify the
economic evaluation of alternatives.3
The need for engineering economy is primarily motivated by the work that engineers do in
performing analyses, synthesizing, and coming to a conclusion as they work on projects of all
sizes. In other words, engineering economy is at the heart of making decisions. These
decisions involve the fundamental elements of cash flows of money, time, and interest rates.
This chapter introduces the basic concepts and terminology necessary for an engineer to
combine these three essential elements in organized, mathematically correct ways to solve
problems that will lead to better decisions.4
Nearly all engineering problems involve considerations and comparisons of cost. Arthur M.
Wellington’s classic remark made nearly fifty years ago that engineering was the art of doing
well for one dollar what any bungler could do for two dollars, was his striking way of
emphasizing this fact.5
1 https://kfknowledgebank.kaplan.co.uk/financial-management
2 Fundamentals of Engineering Economics Fourth Edition, Global Edition, 2020
3 Leland Blank; Anthony Tarquin, 1976. Engineering Economy
4 Leland Blank; Anthony Tarquin, 1976. Engineering Economy
5 Eugene. L. Grant, 1930. Principles of Engineering Economy
4
