Test1 solutions

Test1 solutions - VERSION 1 11 TEST #1 SOLUTIONS TO...

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Unformatted text preview: VERSION 1 11 TEST #1 SOLUTIONS TO MULTIPLE-CHOICE QUESTIONS #1 Most supply functions are elastic at low price levels and inelastic at high price levels. #2 The net income of a business serves two purposes: distribution to the bondholders as divi- dends, and an internal source of equity for new and ongoing projects. #3 I, II and III #4 A decrease in fixed assets at cost #5 liquid #6 I, II and IV #7 III only #8 dQ/dP = -e (-p/12+30) /12 At P=300, dQ/dP = -12.3678 and Q=248.4132 Hence, E D = - (-12.3678) / (248.4132 / 300) = 14.9362 #9 From the graph, one can see that around P=420 Euros, the demand remains constant at Q=100 billion barrels per month, regardless of changes in price. Thus, the price elasticity of demand is . #10 Debt-to-equity ratio: Long Term Liabilities / Shareholders Equity (235 639 000 78 158 000) / -17 311 000 = -9.09 #11 Current ratio: (Current Assets) / (Current Liabilities) 36 832 000 / 78 158 000 = 0.47 #12 II and IV #13 ACP: Accounts Receivable / (Sales revenue / 365) 6 165 000 / (146 277 000 / 365) = 15.38 VERSION 1 12 #14 Ford gained income by eliminating some operations. #15 SOYD: 1 + 2 + 3 + 4 + 5 = 15 DC 1 : (100 000 20 000) (5 / 15) = 26 667 DC 2 : (100 000 20 000) (4 / 15) = 21 333 BV 2 : 100 000 26 667 21 333 = 52 000 #16 With a constant annual production rate, unit-of-production depreciation is identical to straight- line depreciation: DC = (50 000 10 000) /8 = 5000 #17 From the end of this year onward, we have a growing perpetuity with PV = PMT (1.05) / (i g)....
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This note was uploaded on 01/22/2012 for the course MIME 310 taught by Professor Bilido during the Winter '08 term at McGill.

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Test1 solutions - VERSION 1 11 TEST #1 SOLUTIONS TO...

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