ENGINEERING ECONOMICS
ASSIGNMENT 1 (MODULE 1)
INSTRUCTION: Fold your paper or bond paper lengthwise then write on the left
side of your paper first, downward direction. When the left side is full, start writing
on the right side of your paper. If still not enough, you can use a 2nd page. No
erasures please. Handwritten only please. Enclose all your final answers. Take a
clear picture of your paper (1 picture per page only) then send it to your
Classwork in our Google classroom.
1. Problem Solving and Decision making.
Your friend is considering investing in a two-year MBA program. Tuition costs will be
$60,000 for two years while living expenses will be $25,000 per year. She has $10,000 in
savings, which she can spend on her education, and will need to borrow the rest from
her bank. Her annual loan repayment will be $10,500. She currently works as an analyst
and makes $60,000 a year; after she gets her degree she hopes to work as a manager
for $150,000 a year.
Refer to the seven-step procedure to answer these questions:
(a) How should your friend formulate her problem?
(b) What are her projected costs? (Identify all costs)
(c) Suggest alternatives to your friend to reduce the uncertainty associated
with finding a high-income job to pay off her loan
(d) Select a criterion for discriminating among alternatives, and use it to
advise your friend on which course of action to pursue.
(e) Attempt to analyze and compare the alternatives in view of at least
one criterion in addition to cost.
(f) What should your friend do based on the information you and she have?
2. Accounting Concepts
Record the effect of the following transactions on the accounting equation using a
table similar to the example (page 18).
a. Owen inherited $20,000 and invested the cash in the business.
b. Performed services for a client and received cash of $700.
c. Purchased supplies on account, $1,000
d. Invested personal cash of $1,000 in the business.
e. Performed services to clients and received cash of $2,400
f. Paid office rent expenses, $ 900 and advertising expense $100.
g. Withdrew cash of $1,800 for personal use.
