Final Exam for Managerial Economics

Final Exam for Managerial Economics - Econ 3020 Managerial...

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Econ. 3020: Managerial Economics Final Examination, Fall 2006 Instructions: There are 12 questions organized under four problems. Each question is worth 10 points for a maximum score of 120. Answers without solutions will not be counted. Problem No. 1: Investment Analysis 20 points I bought one unit (2 bdrms, 2 baths, kitchen) of the Executive Center for $300,000 with a loan from Bank of Hawaii for 6% per year, payable in equal monthly installment over a twenty year period. I hired also a management firm, the original owner of the hotel the Best Western Co. for a monthly fee of $500. Before I rented out to 4 students for $500 a month each, I spent $10000 on my savings for general cleaning, upgrade of furniture, TV and wireless connections. Find: (a) NPV of the total cost, total revenue and the cash flow, (b) benefit cost ratio, (c) internal rate of return, (d) your conclusion about the profitability of this investment. Please attaché the computer printout that shows the solutions to each of the questions.
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Final Exam for Managerial Economics - Econ 3020 Managerial...

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