Asst1-MS261-W11 - Management Sciences 261, Winter 2011...

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Management Sciences 261, Winter 2011 Assignment #1 Submit by 10:30 a.m., Wednesday January 26, in the electronic drop box on ACE. The drop box will be inactivated after the deadline. REMINDER from course outline : You may consult with other students about your written assignments, but the work that you turn in must be your own . For example, you may discuss with other students how to create a spreadsheet, in general terms, but you must code the spreadsheet yourself . Do not copy another student’s spreadsheet file or part of another student’s spreadsheet file . Do not “lend” your spreadsheet file to another student . Anyone violating these guidelines will be reported to the First Year office, and to the Associate Dean; the typical punishment is 0% on this assignment, and 5% deducted from your course mark. ------------------------------------------------------------------------------------------------------------------------------ Question 1 Michael, a UWaterloo Management Engineering student, is considering his consumption habits, trying to figure out how to save money. He realizes that he could save $2 every day by ordering coffee from C&D instead of Starbucks coffee shop. Since he buys a cup of coffee every workday, this works out to $10 per week, which amounts to a saving of $520 per year. (a) If Michael is 25 today and retires at age 65, how much money will he have accumulated from savings on coffee versus latte? Assume that the annual interest rate is 4% and that the $520 savings occur at the end of each year. [You can solve this problem using FV excel function] (b) Michael was astounded at the answer to part (a) of this problem. He realized he had more wasteful habits, and he made a list of possible savings to see how much richer he could be at age of 65. What are the rewards for Michael’s frugality?[Template for this part is provided, you can use FV] Question 2 Amanda has just completed her undergraduate degree from University of Waterloo and is already planning to enter an MBA program four years from today. The MBA tuition will be $20,000 per year for two years, paid at
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This note was uploaded on 05/17/2011 for the course MSCI 261 taught by Professor Bonkoo during the Spring '09 term at Waterloo.

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Asst1-MS261-W11 - Management Sciences 261, Winter 2011...

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