ISE 460
Spring 2008
FINAL
05/09/08
DO YOUR WORK ON THIS HANDOUT.
THIS WILL EXPEDITE THE GRADING OF THE
PAPERS.
NAME ________________________
FINAL SCORE _________________________
Read these instructions first before proceeding with the exam!!
Please read the problems carefully and provide the information requested and only the
information requested in each question. Use the minimum amount of work required to
answer each question. Show all your work. Using scrap paper to rough out your
responses will result in clearer and more easily gradable exams.
The test is worth 125 points. (about 26% of your total grade for on campus, 29% for
DEN).
The test papers are to be handed in no later than 4:00 P.M. or two hours after we start,
whichever is later.
Approach the solutions of the problems with this time limit
in
mind
It is unfair to your fellow students who hand in their papers on time to use more
time than they had.
Reference tables are distributed separately. Please dispose of them in a paper recycling
container.
The test is open notes and open book. Use your calculator or laptop if needed.
If you want to ask a question, raise your hand and get my, or the TA’s attention.
Making
assumptions and stating them is usually much more time efficient than asking
questions.
The information given in each problem is sufficient to solve it.
If you want to borrow your neighbor’s calculator, ask me to do it for you. No talking to
your neighbors.
Move on to the next problem if you are stuck.
Good luck, I hope you all do well.
1
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
ISE 460
Spring 2008
FINAL
05/09/08
Problem No. 1
Determine whether one would invest in the following three year project if one wanted to earn
at least 15% annually on one’s investments. Include the effects of depreciation, inflation and
income taxes. (40 points). I have attached a grid for your convenience.
The initial investment is $250,000. 25% of this is borrowed at 8%. MACRS is three years and
we will keep the equipment for three years. Annual expenses are $60,000 and income is
$120,000 in the first year, $150,000 in year 2, $65,000 in year 3. Salvage value is $35,000.
This is the end of the preview.
Sign up
to
access the rest of the document.
 Fall '06
 Bottlik
 Depreciation, Net Present Value, Taxation in the United States, ISE

Click to edit the document details