COMM5005_Quantitative Methods for Business_2007 Semester 1_Mid-term Exam with answers.docVIP

THE UNIVERSITY OF NEW SOUTH WALES FACULTY OF BUSINESS COMM5005 QUANTITATIVE METHODS FOR BUSINESS MIDSESSION EXAMINATION APRIL 2007 Time allowed: 60 MINUTES Total number of questions: 20 The questions are of equal value. Each question is worth 1 mark. Fill in your name and student number on the answer sheet. This will be collected at the end of the examination. Each question contains five alternative answers. Choose the alternative which you consider to be most correct (with little or no rounding error) and completely fill in the corresponding circle on the answer sheet using a soft lead pencil. Do not leave extra marks on the answer sheet. Only one answer will be accepted for each question, and there is only one “most correct” answer to each question. Marks will not be deducted for incorrect answers. You may use a non-programmable calculator and your textbook plus class notes. A booklet has been provided for working. You may retain both the working booklet and the question paper at the end of the examination. You may find these useful to review the exam later when solutions are provided. 1. A company produces a household item that sells for $40 per unit with variable costs of $30 per unit. If fixed costs are $500,000, what is the minimum number of units that must be sold for the company to have a profit? (a) 49,999 (b) 7,142 (c) 50,000 (d) 7,143 (e) 50,001 2. A managed fund guarantees that an investment of $25,000 will receive a payment of $10,000 at the end of year 3, $12,000 at the end of year 4 and $15,000 at the end of year 5. What is the net present value of the cash flows from the investment if a rate of discount of 6.4% per annum compounded quarterly is assumed to apply? (a) $3,664.61 (b) $28,464.03 (c) $28,664.61 (d) $3,494.03 (e) $9,652.24 3. If which of the following would be false? (a) (b) (c) (d) both (a) and (b) (e) both (a) and (c) 4. If supply and demand equations for a certain product are: