F10-MidtermExam_261

F10-MidtermExam_261 - Surname Given Name UW ID Number...

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UW ID Number ___________________________ 2 Problem Marks: 1 /8 2 /15 3 /15 4 /12 5 /11 6 /10 7 /10 8 /11 9 /8 Total /100
UW ID Number ___________________________ 3 Problem 1. For each multiple choice question below, select the one correct response by circling the letter. 1.1 [2 marks] What is an annuity? (a) a set of payments that change by the same proportion from one period to the next . (b) a set of payments that change by a constant amount from one period to the next . (c) a set of equal payments over a sequence of periods . (d) a single payment . (e) None of the above is true . 1.2 [2 marks] Two mutually exclusive proposed investments are labelled A and B. Proposal B has a larger first cost than A. Each has a present worth that is greater than zero, i.e. PW A >0 and PW B >0. Indicate the correct statement below. (a) If the internal rate of return of the incremental investment in B over A exceeds MARR, then PW A / PW B >1 . (b)

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This note was uploaded on 04/01/2012 for the course MSCI 261 taught by Professor Bonkoo during the Winter '09 term at Waterloo.

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F10-MidtermExam_261 - Surname Given Name UW ID Number...

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