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Which of the following statements about dividends are correct? (Choose all correct answers.)

Dividends are tax deductible for the entities paying them.

Dividends are tax deductible for shareholders.

Dividends must be paid regularly every year and have priority over interest payments.

Dividends are paid from retained earnings.

Shareholders receiving dividends do not need to include them in their taxable income.

Allocate the following definitions to the correct balance sheet item:

Assets that can be converted to cash over a longer-term nature such as production plant and equipment, buildings.

Bill that needs to be paid in the short term. For example, Bank overdraft, accounts payable (money owed to suppliers)

Earnings kept within the business.

Long term bills such as term bank loans, leases

Assets which convert to cash within 12 months e.g., short term. Cash in tills or bank accounts, accounts receivables (money owed by customers)

Monies received from shareholders purchasing shares.

Why is Discounted Cash Flow (DCF) analysis important in project evaluation?

It ensures that all project costs and benefits are recorded in the same financial period

It eliminates the need to consider initial costs when evaluating a project’s profitability

It focuses only on future benefits without considering associated costs

It accounts for the time value of money by comparing cash flows occurring at different times

Which of the following statements are correct regarding the discount rate and the weighted average cost of capital (WACC)?

The discount rate represents the opportunity cost of capital used to evaluate the present value of future cash flows

A project is generally considered acceptable if its internal rate of return (IRR) exceeds the WACC

The discount rate is always lower than the WACC to make investment options more appealing

WACC is commonly used as the discount rate in project evaluation because it reflects the average return required by both debt and equity holders

Which of the following best describes the correct approach to using economic indicators to assess the viability of a project?

Choose one financial metric (e.g., IRR) and base the decision on its value

Select the project with the shortest payback period

Use Net Present Value (NPV) to compare different projects

Calculate and compare multiple indicators to make a well-rounded decision

Which of the following statements correctly describe key financial principles related to cash flow and present value?

Net Present Value (NPV) calculates the future value of cash inflows and outflows without considering the time value of money

Net cash flow is the difference between cash received and cash spent over a given period, typically a year, but it may be shorter

The time value of money principle states that money available today is worth more than the same amount received in the future

Net cash flow represents the total future value of money received minus money spent over a period of time

Why is it important for engineering students to study engineering economics?

To enhance their ability to evaluate the long-term technical feasibility of engineering systems

To improve their understanding of the mathematical foundations behind engineering models

To develop skills for optimising resource use in engineering design and implementation

To support the integration of advanced technologies in engineering practice

The WBS is organized in a hierarchical manner.

Which of the following statements are true regarding the application of a Work Breakdown Structure (WBS) in project planning? Select all that apply

The WBS is used to decompose the project scope into manageable deliverables.

The WBS is a primary tool for identifying the project’s critical path.

The WBS is used to assign specific resources to project activities.

Which of

the following project management processes is most crucial for managing the

interdependencies between the three parallel paths in this case study?

Risk

Management

Scope

Management

Procurement

Management

Communication

Management