A primary objective of any company is to generate an adequate return to its owners as measured by the income statement, balance sheet, and other financial tools. In coming up with a satisfactory “bottom line” the management of the company is constantly faced with a wide array of investment alternatives, as well as the need to make funds available to finance these investments. The engineer plays a key role in the decision process both by providing the technology that can be exploited, as well as the technical capability to implement the projects that are selected. It is therefore important that he have an adequate knowledge of financial analysis in order to assist in the process of screening projects for their economic acceptability. This paper is aimed at providing the engineer with the proper attitude and perspective so that he can expand his skills to include the selection and justification of project proposals in the engineering area.
