Lecture 1 definition

 Module: 2                                                                                 Duration: 1.5 hours

 Prepared by: A. Ward

 Lecture subject/title: Introduction to the module.  Basic concepts for comparing alternatives

 Learning objectives:

After completing this session and all associated exercises the student will be able to:

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

 Indicative content: 

Teaching materials:  tba

I have not given too much thought to this lecture other than to propose it should be an introduction to the module and the tools and techniques that will be covered.  The module could include some typical engineering problems and situations in which there are financial implications – some of these could overlap with the examples/cases used in lecture 8 so that the ideas are given to the students at the beginning of the module, the theory is then given during the module and the end lecture closes the cognitive loop and shows the students how to solve the problems.

 Pre-requisite understanding:

• Module 1

Lecture 2 definition

Module: 2                                                                                     Duration: 1.5 hours

Prepared by: A. Ward 

Lecture subject/title: Introduction to assets, liabilities and the working capital cycle

Learning objectives:

After completing this session and all associated exercises the student will be able to:

• Describe the difference between fixed and variable assets [2]*
• Classify assets as either fixed or variable for any given business [3]*
• Describe the working capital cycle [2]*
• Describe the meaning of creditors and debtors in the context of the working capital cycle [2]*
• Calculate the working capital cycle duration [3]*
• Explain the significance of credit terms on the finances of an organisation [4]*

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content:

• Fixed and variable asset terminology
• Introduction to liquidity of assets
• Cost of acquisition of an asset and its expected life
• Valuing fixed assets, net realisable value, scrap value, original cost, residual value
• Life cycle cost of ownership of assets
• Working capital cycle for variable assets, work in progress, finished goods stock
• Suppliers and creditors, meaning of creditors, debtors and …days
• Working capital cycle duration and its meaning

Teaching materials:  tba

Pre-requisite understanding:

• Cost estimation (module 1)
• Types of costs (module 1)

Lecture 3 definition

Module: 2                                                                                    Duration: 1.5 hours

Prepared by: A. Ward

Lecture subject/title: Basic structure of the Profit and Loss Statement and Balance Sheet

Learning objectives:

After completing this session and all associated exercises the student will be able to:

• Define what is meant by the ‘accounting period’ for an organisation
• Describe the concept of ‘worth’ and the value of an organisation [2]*
• Describe the basic vertical layout of the Balance Sheet including the significance of the title [2]*
• Describe the basic vertical layout of the Profit and Loss Statement including the significance of the title [2]*
• Demonstrate an ability to interpret real documents [3]*

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content:

• Accounting period
• Concept of worth
• Profit and loss statement structure and explanation of terms
• Balance sheet structure and explanation of terms
• Examples of real company accounts

Teaching materials:  tba

Pre-requisite understanding:

• Fixed and variable assets (module 2 lecture 2)
• Liabilities (module 2 lecture 2)
• Spreadsheets (module 1)

Lecture 4 definition

Module: 2                                                                                   Duration: 1.5 hours

Prepared by: A. Ward

Lecture subject/title:  The concept of depreciation

Learning objectives:

After completing this session and all associated exercises the student will be able to:

• Describe the meaning of Net Book Value of a fixed asset. [2]*
• Describe the meaning and role of depreciation in respect of fixed assets within a business. [2]*
• Define the equations for the straight-line and reducing balance depreciation methods. [1]*
• Calculate the depreciation and Net Book Value of an asset using the straight line and reducing balance methods. [3]*
• Explain the impact of different depreciation rules on reported profit and taxation liability. [4]*

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content:

• Introduce the terms used to show the value of fixed assets
• Introduction to the concept of depreciation
• Explain the rules for dealing with depreciation of assets and how these rules are reported
• Explain the straight line and reducing balance models of depreciation
• Show how depreciation affects reported profit and the Net Book Value of fixed assets
• Explain how asset revaluation is dealt with in the accounts
• Show the inter-relationship between depreciation and taxation through a profit and loss statement example

Teaching materials:  tba

Pre-requisite understanding:

• Meaning of tangible fixed asset (module 2 lecture 2)
• Balance sheet (module 2 lecture 3)
• Profit and Loss statement (module 2 lecture 3)
• Variable costs (this could be explained as only a superficial understanding is required)
• Accounting period (module 2 lecture 3)
• Capital expenditure (module 1 & module 2 lecture 2)

Lecture 5 definition

Module: 2                                                                                  Duration: 1.5 hours

Lecture subject/title: Depreciation and taxation; types of taxation and their place in the profit and loss account

Learning objectives:

After completing this session and all associated exercises the student will be able to:

• Explain the significance of depreciation in business financial performance [4]*
• Explain the effect depreciation has on the profit and loss statement and the balance sheet [4]*
• Describe (two) different types of taxation [2]*
• Compare the impact of difference depreciation policies on the reported profit of a business [6]*

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content:

• Relation between income tax and profit
• Different types of taxation, eg. Personal and corporation
• Corporation tax rates (Egypt), Capital gains tax
• Effective income-tax rates
• Interest and income tax
• Where depreciation appears in the profit and loss statement
• The relationship between changes in asset net book value and depreciation
• Impact of depreciation on tax liability
• Financial regulations in respect of depreciation rules
• Gain or loss on disposition of depreciable assets
• Dealing with tax credits

Teaching materials:  tba

Pre-requisite understanding:

• Fixed asset net book value (module 2 lecture 4)
• Profit and loss statement and balance sheet structures (module 2 lecture 3)
• Notion of depreciation (module 2 lecture 4)

Lecture 6 definition

 Module: 2                                                                                 Duration: 1.5 hours

 Prepared by: A. Ward

 Lecture subject/title: Fixed and variable costs and break even

 Learning objectives:

After completing this session and all associated exercises the student will be able to:

• Define the relationship between cost, volume and profit [1]*
• State the mathematical condition for break-even [1]*
• Describe how the cost of variable assets varies with volume [2]*
• Explain what is meant by the “relevant range” [2]*
• Calculate the break-even volume for a given business scenario [3]*
• Explain the role of cost, volume, profit analysis in business decision making [4]*

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content:

• How cost varies with volume; “relevant range”, linear cost functions
• Cost, Volume, Profit (CVP) equation
• Notion of break-even and mathematical condition for it
• Breakeven analysis
• Using CVP in decision making

Teaching materials:  tba

Pre-requisite understanding:

• Fixed and variable costs (module 2 lecture 2)
• Notion of profit (module 2 lecture 3)

Lecture 7 definition

Module: 2                                                                               Duration: 1.5 hours

Prepared by: A. Ward

Lecture subject/title: Choosing amongst alternative investments

Learning objectives:

After completing this session and all associated exercises the student will be able to:

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content: 

Teaching materials:  tba

Pre-requisite understanding: 

Lecture 8 definition

Module: 2                                                                                      Duration: 1.5 hours

Prepared by: A. Ward

Lecture subject/title: Fundamentals of accounting and relevance to EE. 

Learning objectives:

After completing this session and all associated exercises the student will be able to:

• Understand the role accounting in Engineering Economics [2]*
• Relate accounting theory to real engineering problems [5]*
• Solve simple financial issues relating to engineering problems [3]*

* Number in bracket indicates cognitive level of learning objective based on Bloom’s Taxonomy.  Level ranges from 1 (lowest) to 6 (highest).

Indicative content:

•  Case study examples in applications of engineering with financial issues within the scope of this module.

Teaching materials:  tba

• Proposed to make this lecture the capstone lecture/workshop for the module in which students undertake a number of case study questions that can then be worked through as a group to show the place of the theories in this module set in real engineering scenarios.

Pre-requisite understanding:

• This module
• Module 1