F10-MidtermExam_261

F10-MidtermExam_261 - Surname _ Given Name_ UW ID Number_...

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Surname ____________________________ Given Name_________________ UW ID Number_________________ 1 MIDTERM EXAM MSci 261 Engineering Economics Fall 2010 Thursday, October 28, 7:00 – 9:00 p.m., RCH-302. Department of Management Sciences, Faculty of Engineering Instructor : David Fuller Aids Permitted : Non-communicating calculators only (No cell phones, PDAs or computers). The formula sheet and interest tables are attached (detach them if you wish, as they need not be turned in). Time available : 2 hours. Instructions: Write in the spaces provided. If you need more space, use the blank page 12 or the back of a page, but be sure to write a note to the marker to indicate where your answer continues. This exam has 15 pages, with 9 questions on pages 3 to 11, plus an extra blank page for your work, two pages of interest tables, and a formula sheet; check to make sure no pages are missing. Please put your name and UW ID number on this cover page, and UW ID number on every page. Show your work. Be sure to read the whole of each question and answer all parts. Several questions ask you to write an expression (or an equation) involving the given data, and interest factor symbols. Here is a list of allowed interest factor symbols for these expressions: (F/P,i,N), (P/F,i,N), (A/F,i,N), (F/A,i,N), (A/P,i,N), (P/A,i,N), (A/G,i,N) Note that (P/A,g,i,N) is NOT on the list ! When you calculate an interest rate, please display accuracy to one decimal place, e.g. “12.2% per year.” Grading: see next page
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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
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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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F10-MidtermExam_261 - Surname _ Given Name_ UW ID Number_...

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