# xm1a-w05 - Econ 102 Exam I ECON 102/100 Answers Part I...

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Econ 102 Lecture 100 Exam I Form 1 ECON 102/100 February 10, 2005 Answers Part I: Multiple Choice: (26 questions, 3 pts each = 78 pts) Pick the best answer among the given choices. 1. e 2. b 3. a 4. e 5. c 6. b 7. d 8. d 9. d 10. c 11. d 12. a 13. d 14. a 15. c 16. e 17. a 18. b 19. b 20. b 21. d 22. c 23. a 24. a 25. c 26. b

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Part II: Short Answer: (20pts) Write a solution to each of the following problems. 1. Kristen gets a two year job offer from UGG manufacturing company in Australia. Her perspective employer offers the following two salary options: Option #1: \$5,000 paid at the end of year 1 and \$10,000 paid at the end of year 2 Option #2: \$7,500 paid at the end of year 1 and \$7,300 paid at the end of year 2 a) Kristen is not very good at math, so she hires you to consult with her on which option she should choose. She tells you that the global interest rate is set at 10%. Which option do you recommend? Defend your answer by showing all of your work. (4 points) In order to answer this question, one needs to calculate the Net Present Value (NPV)
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xm1a-w05 - Econ 102 Exam I ECON 102/100 Answers Part I...

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