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Unformatted text preview: VERSION 1 1 M I M E 3 1 0 E N G I N E E R I N G E C O N O M Y M I M E 3 1 0 E N G I N E E R I N G E C O N O M Y Class Test #1 Wednesday, 14 February, 2007 90 minutes PRINT your family name / initial and record your student ID number in the spaces provided below. FAMILY NAME / INITIAL STUDENT ID # This test consists of 21 multiple This test consists of 21 multiple-choice choice questions and two problems requi questions and two problems requiring a ing a full solution. full solution. There are no penalties for incorrect answers in the multiple-choice section. The problems are worth a total of 22 points. MULTIPLE-CHOICE QUESTIONS Circle the correct answers on this test paper and record them on the computer answer sheet. Questions 1 to 6 are worth 3 points each for a total of 18. 1. If the price of TVs were to increase, which one of the following effects would occur? A) The supply curve for TVs will not be affected, but the quantity of cable services sup- plied would increase, thus causing a price decline in this service. B) The supply curve for TV cable services will move to the left, causing a price decline in this service. C) The demand curve for TVs will not be affected, but the demand curve for cable ser- vices would shift to the left. D) The demand curve for TV cable services would shift to the right. 2. Cash outflows for payment of preferred dividends is an example of: A) cash flows from financing activities. B) cash flows from investing activities. C) cash flows from operating activities. D) cash flows from non-cash investing and financing activities. 3. The accumulated depreciation account should show: A) current depreciation expense plus estimated depreciation for next year. B) only the depreciation expense recognized during the current year. C) total depreciation for fixed assets still in use. D) total depreciation for fixed assets since the business was formed. #22: #23: Total: VERSION 1 2 4. With respect to depreciation methods, which of the following statements is/are true? I. Compared to straight-line depreciation, accelerated methods like declining-balance depreciation lead to higher annual depreciation charges in later years. II. Compared to accelerated depreciation methods, the straight-line method results in higher tax payments in later years. III. Accelerated depreciation methods are preferred for tax purposes. A) II only B) III only C) II & III D) I & III 5. Which of the following statements is/are correct? A) The present value of an annuity due exceeds the present value of an ordinary annuity (assuming all else equal). B) The future value of an annuity due exceeds the future value of an ordinary annuity (as- suming all else equal)....
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This note was uploaded on 10/06/2009 for the course MIME 310 taught by Professor Bilido during the Summer '08 term at McGill.
- Summer '08