Mgcr 341 Final Exam
April 2014
Final Examination
Finance 1
MGCR 341
April 24, 2:00PM-5:00PM
FINAL EXAM: Solutions
Examiner:
Vadim di Pietro
Student Name:
McGill ID:
INSTRUCTIONS:
a) This is a CLOSED BOOK and CLOSED NOTES examination.
b) The exam is 180 minutes in length.
c)
SHOW YOUR WORK: In order to receive credit for your answers, you must show your work.
Correct answers with no work shown will not receive any credit. Incorrect answers with partial correct work may receive partial credit.
d) Answer all questions DIRECTLY ON THE EXAM
EXAM.
e) This exam has a total of 17 PAGES including the cover sheet and formula sheet. You may
PAGES,
detach the formula sheet if you like.
f)
There are a total of 11 questions worth a total …show more content…
− ࢍ
. ૢିା
.
ૡ, ,
=
+
.
.
C = 30,958.51
(Note: You could have also gotten the same result by doing the analysis in terms of value as of 254 instead of PV. You could have also split up the cash flows differently. For example, instead of 255 to 300 and 301 to 494 you could have done 255 to 299 and 300 to 494.)
Now that we know how much is spent at t = 255, we can convert that to hamburgers at t = 255:
, ૢૡ.
= ૡ, ૢૢ. ૢ
.
MGCR 341
Page 4 of 17
Real approach (for left hand side):
You could also have solved this using the real approach (for all terms, or more simply for the terms on the left as shown below) where rr = (1.01/1.002)-1 = 0.7984%:
Let C be the number of hamburgers purchased at t = 255.
۱
( − . )ିା
ቆ −
ቇ
࢘࢘ + .
( + ࢘࢘ )ିା ( + ࢘࢘ )
۱( − . )ି ( − . )
( − . )ૢିା
+
ቆ −
ቇ
ૢିା
࢘࢘ + .
( + ࢘࢘ )
( + ࢘࢘ )
ૡ, ,
=
+
.
.
C = ૡ, ૢૢ. ૢ
where C is already in terms of hamburgers since we are using the real approach on the left hand side.
(Note: as long as you set up the equation correctly, no points were deducted for
Final Examination
Finance 1
MGCR 341
April 24, 2:00PM-5:00PM
FINAL EXAM: Solutions
Examiner:
Vadim di Pietro
Student Name:
McGill ID:
INSTRUCTIONS:
a) This is a CLOSED BOOK and CLOSED NOTES examination.
b) The exam is 180 minutes in length.
c)
SHOW YOUR WORK: In order to receive credit for your answers, you must show your work.
Correct answers with no work shown will not receive any credit. Incorrect answers with partial correct work may receive partial credit.
d) Answer all questions DIRECTLY ON THE EXAM
EXAM.
e) This exam has a total of 17 PAGES including the cover sheet and formula sheet. You may
PAGES,
detach the formula sheet if you like.
f)
There are a total of 11 questions worth a total …show more content…
− ࢍ
. ૢିା
.
ૡ, ,
=
+
.
.
C = 30,958.51
(Note: You could have also gotten the same result by doing the analysis in terms of value as of 254 instead of PV. You could have also split up the cash flows differently. For example, instead of 255 to 300 and 301 to 494 you could have done 255 to 299 and 300 to 494.)
Now that we know how much is spent at t = 255, we can convert that to hamburgers at t = 255:
, ૢૡ.
= ૡ, ૢૢ. ૢ
.
MGCR 341
Page 4 of 17
Real approach (for left hand side):
You could also have solved this using the real approach (for all terms, or more simply for the terms on the left as shown below) where rr = (1.01/1.002)-1 = 0.7984%:
Let C be the number of hamburgers purchased at t = 255.
۱
( − . )ିା
ቆ −
ቇ
࢘࢘ + .
( + ࢘࢘ )ିା ( + ࢘࢘ )
۱( − . )ି ( − . )
( − . )ૢିା
+
ቆ −
ቇ
ૢିା
࢘࢘ + .
( + ࢘࢘ )
( + ࢘࢘ )
ૡ, ,
=
+
.
.
C = ૡ, ૢૢ. ૢ
where C is already in terms of hamburgers since we are using the real approach on the left hand side.
(Note: as long as you set up the equation correctly, no points were deducted for