q3version1-1 (1)

q3version1-1 (1) - MGT 3062 FINANCIAL MANAGEMENT SUMMER...

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MGT 3062 FINANCIAL MANAGEMENT SUMMER 2011 QUIZ 3 Student: ____________________________________________________ ID: ______________________ Choose the BEST answer to each question. Bubble in your answer on the form provided. If you feel the answer is not provided, show your work, explain your assumptions, and write your answer to the right of answer E on the scantron. Remove all hats and dark glasses. If you have to go to the restroom, go now. No electronic devices allowed except a calculator. You may not use your cell phone as a calculator. As a courtesy to your classmates, no questions are allowed after the initial instructions are given. Ethics Challenge: I certify by my signature that: the work on this exam is my own without any outside assistance, that I did not provide assistance to another classmate, that I used no electronic devices for information storage, retrieval, or communications, that I have abided by the Georgia Tech honor code in the preparation and execution of this exam. I further understand that my professor will do everything within his power to expel me from Georgia Tech if I am found in violation of the Georgia Tech honor code. Signature:____________________________________________________________________________ 1. You are comparing two mutually exclusive projects. The crossover point is 12.3 percent. You have determined that you should accept project A if the required return is 13.1 percent. This implies you should: A. accept project B only when the required return is equal to the crossover rate. B. always accept project A if the required return exceeds the crossover rate. C. accept project B if the required return is less than 13.1 percent. D. be indifferent to the projects at any discount rate above 13.1 percent. E. always accept project A. 2. Which one of the following costs was incurred in the past and cannot be recouped? A. incremental B. opportunity C. side D. erosion E. sunk 3. An analysis of the change in a project's NPV when a single variable is changed is called _____ analysis. A. scenario B. break-even C. simulation D. forecasting E. sensitivity THE BUSINESS SCHOOL AT GEORGIA TECH Barry Marchman, Ph.D. Room 413 (404) 894-5110
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4. You just purchased some equipment that is classified as 5-year property for MACRS. The equipment cost $147,000. What will the book value of this equipment be at the end of 4 years should you decide to resell the equipment at that point in time? A. $138,532.80 B. $25,401.60 C. $42,336.00 D. $121,598.40 E. $8,467.20 5. Morris Motors just purchased some MACRS 5-year property at a cost of $216,000. Which one of the following will correctly give you the book value of this equipment at the end of year 2? A. [$216,000
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q3version1-1 (1) - MGT 3062 FINANCIAL MANAGEMENT SUMMER...

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