Group Assignment _2

Group Assignment _2 - Group Assignment #2 Question #1...

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Group Assignment #2 Question #1 Environmental Consulting Inc. (ECI) is a private corporation that assesses environmental contamination of land and manages cleanup projects. ECI's main customers are refining and manufacturing companies, retail gas station chains, and banks that have taken contaminated properties as security for loans. Of ECI's common shares, 40% are owned by its president; ECI's four senior managers own 15% each. The business was established in 1990 and has been growing steadily over the last 10 years. ECI employs 30 engineers and technicians, who earn salaries and also receive annual bonuses based on the profitability of the consulting projects they bring to ECI. ECI's business operations consist of the following: 1. ECI contracts with customers to conduct environmental assessments. There are three kinds of assessment projects: Phase 1, Phase 2, and Phase 3. Projects can take from six weeks to several years to complete. 2. Phase 1 projects are routine soil and water tests, so the costs and engineering hours are very- predictable. Phase 1 projects usually take about six weeks. 3. Phase 2 projects involve establishing a plan to clean up a contaminated site. Costs for this phase are fairly predictable because standard procedures are used to assess the various available cleanup techniques and to determine the optimal methods based on cost/benefit analysis. Phase 2 projects take 12 to 18 months to complete. 4. Phase 3 projects involve actual cleanup procedures. The costs of these projects are highly variable. ECI
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Group Assignment _2 - Group Assignment #2 Question #1...

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