Midterm codes 1 & 2 21.11.2016.docx - MAT1092 –...

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MAT1092 – Midterm (60’) Code 1 Student’s full name (in Vietnamese): Student’s code: Problem 1. A project requires an initial outlay of $100000 and produces a return of $30000 at the end of year 1, $40000 at the end of year 2, and $R at the end of year 3. a/ Determine the value of R if the internal rate of return is 10%. b/ Given that R = 50000 and the market rate r = 9%, what is the net present value of the project Problem 2 . The prices of a good at the end of each year between 2013 and 2015 (with 2014 being the base year) are listed in the table which also shows the annual rate of inflation: year 2013 2014 2015 price 255 260 280 inflation 4% 6% 5% If the index number of the real price for 2012 is 90, work out the nominal value of the price in 2012. Problem 3. The demand function for a firm’s domestic and foreign markets are: P 1 = 40 – 5Q 1 P 2 = 50 – 4Q 2 and the total cost function is: TC = 30 + 30Q, where Q = Q 1 + Q 2 . Determine the prices needed to maximize profit with price discrimination.
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