ie 305 exam 10

# ie 305 exam 10 - that initial cash flow(s of incremental...

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IE 305 Exam 1 Review Topics

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Main Topics P, F, A, G and g Remember n and i must be consistent Look closely at cash flow diagrams Effective Interest (Annual or Periodic) APR is Nominal (same as APY if cash flow is annual) APY is Effective (compounding more frequent than cash flow) Study continuous compounding (not continuous payments).
Conventional and Discounted Focus on discounted Find PV of investment given MARR Make sure alternatives are at same time (i.e. use LCM) Find AE of investment given MARR No need for LCM (if need<=LCM or inf.) Find CE for continuous investment Using Effective Periodic or converting to AE

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IRR and Incremental Rate of Return Analysis Iterate to find i* which makes PW(i*)=0 Simple and Non-Simple, plus Simple Borrowing Incremental Analysis Start with lowest investments and justify larger. Always subtract larger investment from smaller so

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Unformatted text preview: that initial cash flow(s) of incremental are neg. – If incremental is >= MARR then select higher investment – Switch to PW if incremental cash flows are non-simple (regardless of # of i*) Materials • Bring your own Formula (examples) sheet. 1 piece of paper written on both sides • Formula sheet will be provided • Bring your student ID number • Bring 1 (maybe 2 calculators and pencils) • Sign the Mult. Choice pages, Essay pages and answer sheet. Exam Structure • 15 Multiple choice (scantron). All questions will have a valid answer. – Some concept questions – Remaining are short problems • 2 Essay problems – Word problems – Cash Flow Diagram – 2 to 3 step calculations Location and Time • 8-10 pm on Wednesday night • 1210 Lebaron lecture hall • No lecture on Wed at noon. • Special office hours (Dave) 11-5pm on Wednesday....
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ie 305 exam 10 - that initial cash flow(s of incremental...

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