Economics for Telecom Engineers

Courses: Networks (General)
  • Course:Economics for Telecom Engineers
  • Course ID:ENGECON Duration:3 days Where: Your Office (7+ Persons)
  • Available as a private, customized course for your group at your offices or ours and in some cases as a WebLive(TM) class.

  • Download Course Description (PDF)

Course Outline

Day 1:  Basics, P&L, and Balance Sheet

 

  • Introduction
  • The Engineer’s Financial Role
  • What Are the Cost Elements of a Network
  • Cost versus Revenue versus Income
  • Fiscal Understanding
  • What is a Balance Sheet?
  • Example:  Reviewing a Balance Sheet
  • Objectives of an Economic Analysis/Engineering Economic Study
  • The Engineering Economic Study Processes
  • What Engineering Economic Studies Are Not and Don’t Do
  •  Review and Q/A
  •  Exercise:  Identifying the Cost Elements of Your Product(s) and Service(s)
  • Case Study
  • Accounting Concepts
    • Telecom/Technology Accounting Classifications
  • What is an Asset?
    • Intellectual Property is an Asset:  How Do you Value it? Why Do You Value it?
  • Liabilities and Owner’s Equity
  • Balance Sheet
  • Shareowner’s Equity
  • Operating Revenues
  • Operating Expenses
  • Income Statement:  What is Income?
  • What is the Relationship between the Balance Sheet and the Income Statement?
  • After Income:  Earnings and Profit
  • How Do You Balance Technology and Cost?
  • Review and Q/A
  • Open Discussion:  How Do You Make a Decision?
  • Case Study:  Making a Decision

 

Day 2:  Capital Expenditure

 

  • Capital Expenditures and the Nature of Costs
  • What Are Capital Expenditure Policies?
  • Example:  Capital Expenditure Policies in a Healthy Company
  • Capital Expenditure Policy Structure
  • Example:  Capital Expenditure Policy
  • What Are:
    • Revenue
    • Gross Profit
    • Break Even
    • Fixed Capital Investment
    • Working Capital
    • Income Tax
    • Depreciation
    • Interest
    • Net Profit/Operating Profit
    • Rate of Return on Investment
    • Payout/Payback Period
    • Discounted Rate of Return
    • Minimum Rate of Return
  • Example Review:  Income and Rate of Return
  • Case Study:  Developing the Rate of Return
  • Cost Expenditures:  When Can You and Should You Spend Capital?
  • Capital Costs
  • First Costs:  Their Role and Future Impact
  • Financial Loading:  Engineering Loading
  • Continuing Costs
  • Maintenance Expenses
  • Depreciation
  • Advertising
  • Travel and Entertainment (T&E)
  • Payroll
  • Benefits
  • General Administration
  • Outsourcing
  • Example:  Typical Cost Structure of a Company
  • Example:  Your Own Company
  • Equipment
    • Salvage, Scrap, and Junk Value
    • Estimating the Useful Life of an Asset
  • Attributes of Depreciation:  Why Is It Important?
    • Methods of Depreciation
    • Straight-Line Method
    • Declining-Balance Method
    • Double-Declining Balance Method
    • Sum-of-the-Years-Digits Method
    • The Sinking-Fund Method
  • Which Depreciation Method Do You Use, If at All?
  • Exercise: Sample Design and Engineering Problem Taking into Account Engineering Economics
  • Case Study:   Valuing Equipment and Technology

 

Day 3: Mathematics of Investment

 

  • Mathematics of Money
    • Time is Money and Money Is Time
  • Interest:  Income and Penalty
  • Equivalence
  • Present Worth and Future Worth:  Money and Equipment
  • Example:  Review
  • What is an Annuity?
  • Example of an Annuity
  • Time Value of Money – How Does It Fit Into Your Business?
  • Future Worth of Money
  • Present Worth of Money
  • Example Review of How Your Technology’s Value is Impacted by Time
  • Investment Decision Frameworks and Drivers
    • Qualitative Decision Framework
    • Quantitative Decision Framework
  • Investment Decision out of Necessity
  • Replacing Worn out and Obsolete Equipment
  • Repairs to Facilities
  • Research and Development
  • The Investment Evaluation and the Market Strategy; Integrating the Two and  Making a Decision
  • Case Study:  Start to finish; taking a product from beginning to sale.
  • Wrap-up:  Putting It All Together – Group Discussion