final practice 1 sol - IE 343 Fall 2009 Name: _ Student ID:...

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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 1 IE 343 Final exam. Dec 14 th , 2009 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. For problems 1, 2, 4, note that no interest tables are required; you are to carry your answer to the point where the equation for the problem is specified –e.g., “1,000(A/P, 10%, 5) + 1,500 + 200(A/F, 10%, 5)” and stop here. Your grade on this problem will be based on the correctness of the equation and the clarity of your work leading up to the equation. For the remaining problems, interest tables may be used and are provided for you to perform your calculations.
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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 2 1. True or false (2 points each). a. The breakeven point occurs when there is no profit or loss. T F b. An alternative may be selected as long as its IRR is positive. T F c. The MACRS assumes the terminal book value of any asset is zero. T F d. A zero devaluation rate implies that the foreign currency and the USD are equal. T F e. In a spider-plot, the factors with the high sensitivity to the project has the flattest curves. T F
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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 3 2. Define the following terms. (2 points each) a. Opportunity cost Cost of the next best alternative, cost of the best rejected opportunity b. Salvage value Estimated value of an asset at the end of its useful life, terminal book value c. Economic life Number of years that results in the minimum EUAC of owning/operating the asset d. Inflation General increase in average price of goods/services that brings about a reduction in buying power of money e. Simple interest Interest earned only on the principal amount
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This note was uploaded on 02/07/2012 for the course IE 343 taught by Professor Vincent,g during the Spring '08 term at Purdue University-West Lafayette.

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final practice 1 sol - IE 343 Fall 2009 Name: _ Student ID:...

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