class test 1 - #20/13#21/13 Total/26 VERSION 1 MIME 310...

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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 Class Test #1 – Friday, 13 February, 2009 – 90 minutes PRINT your family name / initial and record your student ID number in the spaces provided below. FAMILY NAME / INITIAL STUDENT ID # S O L U T I O N S This test consists of 19 multiple-choice questions, and two problems requiring a full solution. The multiple-choice questions are worth a total of 74 points. There are no penalties for incorrect answers. The problems are worth a total of 26 points. MULTIPLE-CHOICE QUESTIONS Circle the correct answers on this test paper and record them on the computer answer sheet. Multiple-choice Statements – Circle the correct answer on this test paper and record it on the computer answer sheet. (2 points each for a total of 14) Note : There are no penalties for incorrect answers. 1. Which of the following statements is/are correct? All else being the same, I. the present value of an amount of money received in the future increases as the dis- count rate increases. II. the present value of an amount of money received in the future increases the further away it is from today. III. the present value equivalent of a future value is always smaller than that value when both the interest rate and the number of compounding periods are positive. A) I only B) I and II only C) II only D) III only E) II and III only #20: /13 #21: /13 Total: /26
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VERSION 1 2 2. A bond sold five weeks ago for $1100. The bond is worth $1050 in today's market. As- suming no changes in risk, which one of the following statements is true? 3. The assets in a Balance sheet ___________________________________. I. always sum up to a value equal to total liabilities less shareholders' equity. II. represent items acquired with the use of the firm's assumed liabilities and equity. III. are listed downwards in order of increasing liquidity. 4. Which of the following is not a current asset?
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