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IE 343 Midterm 1 Spr 10 Sol0

# IE 343 Midterm 1 Spr 10 Sol0 - IE 343 Spring 2010 Midterm 1...

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IE 343 Spring 2010 Name: Midterm 1 (last) (first) Section: IE 343 Midterm 1 Feb 23 rd , 2010 Closed book, closed notes. Write your name and section number in the spaces provided above. Write your name on each page as well, so that in the event the pages are separated, we can still your grade your exam. Show all of your work in the spaces provided. Interest rate tables are provided for you to use in questions that require numerical answers. For problems requiring expressions as answers, carry your solution to the point where the equation for each problem is specified. For example 2,000 (P/A, 4%, 5) + 3,500 (P/F, 4%, 5) 4,000 Hint: Even if a problem doesn’t require you to draw a cash - flow diagram, it’s always a good idea to draw one.

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IE 343 Spring 2010 Name: Midterm 1 (last) (first) 2 1. Define the following terms and provide a short example for each of them: a. Direct cost (4) ANS: (pp. 22) Direct costs are costs that can be reasonably measured and allocated to a specific output or work activity. For example, labor and material costs. b. Sunk cost (4) ANS: (pp. 23) A sunk cost is one that has occurred in the past and has no relevance to estimates of future costs and revenues related to an alternative course of action. For example, earnest money on a house or money spent on a passport.
IE 343 Spring 2010 Name: Midterm 1 (last) (first) 3 2. Black & Decker manufacture and sell toasters as part of their product line. The variable

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IE 343 Midterm 1 Spr 10 Sol0 - IE 343 Spring 2010 Midterm 1...

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