ECON 4410 F16 Midterm Exam with Answers.pdf

ECON 4410 F16 Midterm Exam with Answers.pdf - YORK...

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1 YORK UNIVERSITY FACULTY OF LIBERAL ARTS AND PROFESSIONAL STUDIES DEPARTMENT OF ECONOMICS Corporate Finance- AP/ECON 4410 3.00 B Fall 2016 Midterm Exam Suggested Answers 21 October 2016 NAME: YORK ID: _______________________________________________________________________________ Course director: Tsvetanka Karagyozova Allotted time: 2.5 hours Total marks: 100 marks Instructions: This exam booklet includes 14 pages in total. Please make sure that your copy is complete. The exam is worth 100 points. The exam consists of 2 sections: I. Multiple Choice Questions (50 % of your grade); II. Short Answers (50 % of your grade). Section I Instructions: There are 25 multiple-choice questions, each worth 2 points. Identify the letter of the choice that best completes the statement or answers the question. Section II Instructions: Please choose and answer any 5 of the 6 short-answer questions. Provide a brief explanation to your answer for complete credit. Each question is worth 10 points. Please answer the multiple-choice questions on the provided Scantron sheet. Answer the questions in Section II directly on this booklet, in the spaces provided. Please attempt all questions, and be sure to read each question carefully. Please write legibly. Calculators (any kind) are allowed. No cell phones please. Work independently. G OOD L UCK !
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2 I. M ULTIPLE -C HOICE Q UESTIONS Identify the letter of the choice that best completes the statement or answers the question. Please record your answers on the provided Scantron sheet. Each question has only ONE correct answer. If two answers are selected, you will receive zero credit on the question. If there is a discrepancy between the answer provided in your booklet and the Scantron, the answer in the Scantron will be considered towards your grade. Q UESTION Y OUR A NSWER Q UESTION Y OUR A NSWER Q UESTION Y OUR A NSWER 1 C 11 D 21 C 2 C 12 B 22 C 3 C 13 B 23 B 4 C 14 C 24 A 5 A 15 C 25 C 6 D 16 B 7 E 17 D 8 B 18 C 9 C 19 B 10 D 20 A 1. The advantages of the payback method of project analysis include: I. the application of a discount rate to each separate cash flow. II. bias towards liquidity. III. ease of use. IV. arbitrary cut-off point. A. I and II only B. I and III only C. II and III only D. II and IV only E. II, III, and IV only 2. Which one of the following is the best example of two mutually exclusive projects?
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3 3. You are analyzing a project and have prepared the following data: Required payback period: 2.5 years Required return: 8.50% Based on the net present value of _______ for this project, you should _______ the project.
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