CASE STUDY Emergency Power Project Case Study Objectives Upon completion of this case study report, you should be able to:

1. apply engineering economic decision-making process, 2. prepare a detailed financial analysis report, and 3. provide a professional recommendation on the finding of the study.

As expected, salary and rental would form a significant portion of the operating expenditure. Utilities, transportation, equipment repair and general maintenance also form part of the costs. Other forms of commitment including tax, legal fee etc. is lumped into miscellaneous expenses. All budgeted expenses are tabulated in TABLE 2. For simplicity in analyzing the business profitability, the expenses are calculated based on the budgeted value rather than the actual costs.

TABLE 2: EPSB Original Expenses (monthly estimations)

Cost Item	Descriptions
Shop Rental	RM2000 per month for 3 years and will increase by 10 % in 2021.
Utilities & Transportation	2 % of total revenue
Repair & Maintenance	RM500 per month for 3 years and will increase by 10 % in 2021
IT Services	RM300 per month for 3 years and will increase by 10 % in 2021
Staff Salary	RM100 per day for 22 per month for 3 persons in 2018 and increase by 5 % every year onward
Owner Salary	RM200 per day for 22 per month for 1 person in 2018 and increase by 5% every year onward
Miscellaneous (tax, legal etc.)	RM800

Preparation of Business Expansion Brief The company needs your assistance in preparing a business brief to highlight the health of the business and the merit to expand business venture. For the case study provided, you are expected to study and prepare a project brief that must include (but not limited to) the following steps of economic analysis: 1. Summary of project design requirement and constraints.

2. List and discuss project completion alternatives and cost impact.

3. State assumptions and project constraints.

4. Tabulate all costs and benefits expected.

5. Report on comparative analysis of potential options available

6. Identify critical factors that can influence decision through sensitivity analysis

7. Provide recommendation of the most attractive options and indicate potential areas of concern.