Midterm 2 - Summer 2005

Midterm 2 - Summer 2005 - MIME 310 ENGINEERING ECONOMY QUIZ...

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Unformatted text preview: MIME 310 ENGINEERING ECONOMY QUIZ #2 Monday, May 16, 2005 8:45 to 9:30 Page 1 VERSION #1 FAMILY NAME / IN FAMILY NAME / INITIAL TIAL STUDENT ID # STUDENT ID # S O L U T I O N S PART 1. True or False Statements Circle the correct answer and record it on the computer answer sheet. (10 points each for a total of 20) Note : There are no penalties for incorrect answers. 1. You hold a winning ticket from your provincial lottery. It entitles the bearer to re- ceive payments of $50 000 at the end of each of the next 20 years. Whatever the market interest rate (above zero), you should be able to sell this ticket for more than $1 million in the open market. A) True B) False 2. All other factors held constant, the present value of a given annuity increases as the number of compounding periods per year increases. A) True B) False PART 2. Multiple-choice Statements and Short Problems Circle the correct answer and record it on the computer answer sheet. (10 points each for a total of 80) Note : There are no penalties for incorrect answers. 3. In 1998, Vincent Van Gogh's painting, "Sunflowers", sold for $10 million to a Japa- nese investor. Originally, it was purchased for $125 by your great-grandfather, one hundred years before. In 2004, the painting was sold again for $36 million to a Canadian museum. What annual interest rate did your family earn on the original...
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This note was uploaded on 01/22/2012 for the course MIME 310 taught by Professor Bilido during the Summer '08 term at McGill.

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Midterm 2 - Summer 2005 - MIME 310 ENGINEERING ECONOMY QUIZ...

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