Exam_3_Practice

Exam_3_Practice - IE 343 Fall 2009 Name Student ID IE 343...

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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 1 IE 343 Midterm 3 - Practice. Closed Book, Closed Notes Show all of your work . Your work and answers must be shown on the pages provided. Write your name and student ID in the spaces provided above.
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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 2 1. True or false ( 2 points each ). a) Real interest rate is an estimate of the increase in true buying power of money. T F b) Actual dollars represent the purchasing power of money. T F c) Year-by-year MV estimates are not needed to decide when a defender should be replaced. T F d) A defender should be replaced in the year of its min. EUAC. T F e) Real dollars and actual dollars are the same in the base year. T F
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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 3 2. A firm desires to determine the most economic equipment-overhauling schedule alternative to provide service for the next 9 years of operation. The firm’s real MARR is 6% per year, and the inflation rate is estimated at 2% per year. The following are alternatives, with all costs expressed in actual dollars: a. Completely overhaul for $10,000 now. b.
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Exam_3_Practice - IE 343 Fall 2009 Name Student ID IE 343...

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