City University he Uae fr tne SCHOOL OF ENGINEERING AND MATHEMATICAL SCIENCES BEng in Biomedical Engineering and Applied Physics BEng in Electrical and Electronic Engineering BEng in Media Communication Systems BEng in Multi-media and Internet Systems BSc / BEng in Computer Systems Engineering ENGINEERING MANAGEMENT 3 Module: ET3051 Part 3 Examination Date: Wednesday 4th May 2005 Time: 1000 - 1300 Answer FIVE of the EIGHT questions Answer at least ONE question from Section B USE A SEPARATE ANSWER BOOK FOR EACH QUESTION All questions carry equal marks ‘Answer books to be provided: FIVE Calculators permitted: YES Tables / graph paper required: NO Can question paper be removed from the examination room: YES External Examiners: Professor P M Taylor, Professor N M White Internal Examiner: Professor D W Stupples, Dr L R P Reavill 1114Module ET3051: Engineering Management 3 Examiner: Professor D W Stupples SECTION A Question 1 a. In relation to the balance sheet of a typical report and accounts, explain what is meant by “fixed assets’, ‘current assets’, ‘current liabilities’ and ‘capital and reserves’ (do not just list items covered under each heading). [8 Marks} b. This question relates to the attached extracts from the BOC Group Report and Accounts for 2002. Draw a representation of the balance sheet for the BOC Group in a block form in two adjoining columns under the headings of ‘Assets’ and ‘Shareholder Funds and Liabilities’. Show clearly the value in £m for each block within the columns, and the balancing figure in £m. [12 Marks} Question 2 ‘This question relates to the analysis of the report and accounts. a, Return on Capital Employed (ROCE) is one of the primary analysis measures for assessing a company’s performance. Define the formula for ROCE using net total assets, {7 Marks] b. Using the formula developed in Part (a), calculate the ROCE for the BOC Group for the year 2002 (use attached extracts from the 2002 Report and Accounts). [7 Marks} ¢. What is the Return on Equity (ROE) for the BOC Group for the year 2002 - use the provided extracts for the 2002 Report and Accounts, and do not include minority interests? [6 marks] 2114Question 3 ‘A hospital laundry facility is to be built in Islington. The Islington Health Management Team has received two tenders: 1. The cost of Option A is £900,000. The benefit from Option A is predicted to be £250,000 per annum, the cost of running the facility is £70,000 per annum, and it has a life expectancy of 10 years. 2. The cost of Option B is £1,000,000. The benefit from Option B is predicted to ‘be £700,000 per annum, the cost of running the facility is £500,000 per annum, and it also has a life expectancy of 10 years. ‘The management team has asked you to help with the investment appraisal. You are to: a. Calculate the Net Present Value (NPV) for both Option A and Option B given a discount rate of 8% (use the compound interest tables provided). . Calculate the Internal Rate of Return (IRR) for both options and comment on the risk head room (use the compound interest tables provided). c. Calculate the Benefit/cost ratio using firstly ‘all benefits (not discounted)/all costs’, and secondly ‘net benefits (not discounted)/investment” for both options. 4. Which option would you recommend and why (maximum 50 words)? [20 Marks] (each part carries an equal mark) Question 4 When two alternative machines which do a similar job, produce different benefits, have different lives, different capital costs and different scrap values, EAV can be used to determine which machine is the better investment. Assume a discount rate of 10%, which of the two machines MI and M2 is the better investment? Machine MI © initial cost Co = £200 © annual benefits = £84 scrap value = £80 © life=3 years Machine M2 initial cost Co = £270 © annual benefits = £90 scrap value = £70 © life = Syears Use the compound interest tables provided for the calculations. [20 Marks} 3/14‘Question 5 ‘The following two questions relate to contract law. a. A contract results from an offer and acceptance. What conditions apply to the offer and acceptance? b. A contract must involve a consideration or payment. Describe what is meant by this. (20 Marks] (each part carries 10 marks) Question 6 This question relates to the Nash Equilibrium. a. Explain why the Nash Equilibrium is important to commercial companies, and give a short definition of the Equilibrium concept. (6 Marks} 'b. A software games company (Games for Fun — GFF) has been reviewing the UK market for launching new advanced games. This review has found that the UK market for new advanced games segments is as follows; 40% favour on-line interactive (OLI) games, 35% favour games with virtual reality (VR), and 25% favour 3D games. GFF has also discovered that its staunch rival ‘Video Games Intemational (VGI) is undertaking a similar market assessment. Use the Nash Equilibrium to develop a market strategy for GFF against VGI and comment on your result. [14 Marks] 4114Engineering Management 3 Module ET305: i Dr LRP Reavill Examinet Human Resource Management SECTION B Question 7 a, By means of a diagram, or by other means, explain the basic model of one-to-one communication, [6 Marks] b. What difficulties are encountered when trying to achieve good communication? [6 Marks} ¢. Identify some methods which engineers use to communicate in their professional work, and indicate why the particular methods are chosen. [8 Marks] Question 8 “There is no one style of leadership that is effective in all situations” Identify a range of leadership styles that have been defined by behavioural scientists. Indicate the contribution made by both the leader and the followers to the decision-making process, and discuss which leadership styles are most. appropriate to the work of professional engineers. (20 Marks} 5114‘Group balance sheet ‘A230 September = _—— — Ineagfble asses asset Beene = Share of gross assets = stare of gross lables — loans to fine ventures levestment in associates ~"hare of net assets loans to asociates Investment in own shares Other vestmens _ ‘rvesomenes Current assets Stocks 1%) 2600275, Debtors fling due within one year mm 7338713, Debtors fling due after more than one year te aaa al levesorients 33, (Gash ae banc and in hand mg 185233. 1286, Correnc labilices ‘Creditors: amounts falling due within one year Borrowings and nance leases me QD (ee Other ereditors 1 __ (857. (2479) (1281. Net current (lablites)/assets (sy) 4 ‘Total assets less current lablities 36452 3671. Groficors amount ling due after more than ‘more than one year Borrowings and finance leases (121.9) (1,019: Shar crear Ga GR (179.0) - (1.079. Provisions for labilities and charges iq) (4075) G19. ‘Total net assets excluding pension assets and Habilties 2,058.7 2172 Pension assexs “43107: Pension lables 4) GID) 66: “Total net assets including pension assets and abilities 19020 2223) Ely ced up are pt a. ‘Stare premium accoune mo 36335; Revahition reserves fg 378 a7. Proft and loss account 13048 1400, Pensions reserves ru @565) 47. Joint ventures’ reserves ne 888 reserves fg 33533: Equity shareholders’ funds 6041 2006: Minorty shareholders’ equity itarests 79137: ‘Total capital and reserves 1,902.0 2203) ‘The financial statements were approved by the board of directors on 22 Novernber 2002 and are signed on ts behalf by: AE Isaac Director R Médor Director 6/14= 4017.9 41592 - 32At woo - «(MOD (2580 63 4504 (1057) 3527 599 568 EE (Woas) 4223 36 36 5306 (1047) 059 123 3 1669 en 3622 Pm 2576 35) BAL US Er se 7114COMPOUND INTEREST TAULES 575 jldisiie Hii Iijs hij Wie arest Factors (Univorre Payasant Series Whip Lip ‘Stogie Payment Mike saneny fags fda mus ay EaRRR anneal Renee peSaagaURaE RRRRHERERS aE aR RE ereegiznasal JSERER| nae eae JMARAA/ARRARARRAIOVARS| Roeeaaieaist tH una eaegeat srasas HERE: SaREaIRAatS NUCUEATEYS SQERQUSSSS HERES gUGRy Ags arm elit aati a Ty 8/14SM ATASEMARIAARARIADARAAARAAT VAR ORE STARE | Absa] aeseanngaareaianeagarsay EERE EELLE EELEMFEEE sje] setatnunainsna ageennseualegne sntagensanieas Jub asl SENSE OARS neaanansaslpapagaqassiags eaqealts ed ies Tas nee i319, i377 A A] [fa aje| AERP ESAS [igypije tseaaiaeaasineas EAE AGRUACURULA TG Tat od djs tevaaceanenaaananaeeeeg eee dais eaeetaee caeieageesemnecacenee ENE ii} ajs tesa eaeaanEnSeesgnaaeminasg ureters at 6 os Tameulere*g tag nScRag AAA aaRRARR AMAT HCV RUSBERSE| eng 9114COMPOUND INTEREST TABLES 577, ketarnt Factors {dae if His i hile {tis Tihs jae ils * ofA35 ofd8d wea ane Haas sta BREA a4 anaee| ens Aga gas LEH nen BRES jyrwng| SBaaa eee naan LEEEE| jsessa eae BEE BELLE neta anak eaaag jsseag nese aay aatae 3888 Raa eae RERAR| ae 1s Hial ts Ht Hale ate eSAsgiegact ARBRE rag sages Bay He ratad tated AAAAR/ARRAA ARRAS tat auail eed RRREE aati LEG sds 10/1457B__ COMPOUND INTEREST TABLES. so ate SiERREE GE i aS HEEY elsuugeleeeeeleeessierosels. slesazelsesasigeeuelsuusmleewaelessssisccnclsemuelmeunn|® ia “one 0763 23 a0 ar “os2t 2 pee 3 oat o030 3a ‘o301 ‘ower 33 2336, 0388 o “a2 “00236 1023 ‘sa05% « BI poe tole saase ae ‘boes2 tomes lom. a3e0 = 00829 moms 10s ase s 0032800033 1003 701 s ~o0208 000 —~-s9a° ‘sear 2 ‘or os sase7 B pos bos ps2 e ‘feos “toons So36 4 0030 ___ ‘00003, ‘oat oe ‘poois e000 ‘99812 3s boiz “aoa 100 poor ooo 14114vhizh nal “nox age ene ii ee eve iii EEGs auc] bs E ‘ist a eas BREEg BREE eee cee ve iy TE ee BSE ebEEY seen a) eae enn nay Ce PEReEEN Fe] le nae EE nates nscaslaucee ee ei) SU BEE ii HH Hu Hu titi il TREE eee | nagae SRaBe EERE EEE tks sigs uae eeeee| is aie mu ashy aga cbEEG Gate Baas asus BEE eae ate Peay eaaaE ney seusel SSRIR/ERCEELS se relnaune : coreaaan Et] onan nant tae] nail aft sebanlonnagl etal cate Tl euaeeheennalaf tf] aesuatanes ata esr atti Bouse peealeg oes aD anyvLieL need eee aa Setecez sian 'Ba8Eel 4H Rea ARIE Rent Pn PUEPEEE BRRRDICEEED| cient BEEGRISEESS GERESRSERE a aBasal EGRGHIGREE Bee e Btn PEBEE mn babe Ta REESE Gcbee Hi RE BEE sue rm ny iit aati buat baat Veet ti Ban REEES SERS bu ate GEES Ban SRsasinresy aoa EaRua ety peau ena mn aon aaRRREREs aaa aucun BECCH Sew se! 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