WHAT AN ENGINEER SHOULD KNOW ABOUT CAPITAL BUDGETING

One of the areas where engineer/businessman communication breaks down most frequently is in the investment decision-making process. The principal reason for this breakdown in communication, probably is the engineer's imperfect understanding of the businessman's perspective and the capital budgeting process. Over the last few years, the subject of engineering economy has been treated with increasing frequency in the marine literature. As a result, the engineer has learned much about cash flows and the time value of money, about depreciation schedules and tax effects, about the cost of capital and the derivation of interest formulae; but has gained little insight into the businessman's perspective and little appreciation for the many other facets of the capital budgeting decision. This paper provides some insight into the capital budgeting process from the standpoint of the businessman and attempts to shed some light on his perspective and approach to the investment decision-making process.

  • Corporate Authors:

    University of Michigan, Ann Arbor

    Department of Naval Architects and Marine Engineers
    Ann Arbor, MI  USA  48109
  • Authors:
    • Klausner, R F
  • Publication Date: 1970-5

Media Info

  • Pagination: 10 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00072887
  • Record Type: Publication
  • Source Agency: University of Michigan, Ann Arbor
  • Report/Paper Numbers: No. 083
  • Files: TRIS
  • Created Date: Jan 9 1975 12:00AM