4. BUSI 1003 - Final Exam

Student’s Name:
____________________________________________________

(Please Print)

ID:
_______________________________

Course: BUSI 1003 Section: 1H

Date:
Tuesday March 17, 2020 Time: 12:00-15:00

Professor: Dr. Abdelghani Mehailia Duration:
3 Hrs.

Final Exam Instructions

·
Worth 35% of final grade

·
Marks: Part A: 60 marks; Part B: 75 marks

Part A

30 short answer questions worth 2 marks each.
Total: 60 marks.

1.
In ordinary dating, are both
the credit and discount periods measured with Day 1 being the invoice date or the day after?

2.
Is the contribution rate the
difference between the selling price and the variable cost per unit?

3.
Is markup the difference
between selling price and cost of buying plus expenses, or the sum of expenses and profit?

4.
Is the face value of a Treasury
bill the present value or the future value?

5.
If an investment loses 30% in
one year and gains 30% the following year, is there a net change in value?

6.
Given S = P(1+rt),
solve for t.

7.
What is the meaning of the
y-intercept in a cost function graph?

8.
What is the purpose of the
consumer price index?

9.
If a company is operating
beyond the breakeven point, then does each additional dollar of revenue add a
dollar to the net income?

10.
Is the break-even volume, in
units, a) the ratio of fixed cost per unit contribution margin or b) the ratio of selling price per
unit contribution margin?

11.
If a loan has a 10-year
amortization period with a fixed interest rate, will the interest paid in the
eighth year be equal to the interest paid in the fifth year?

12.
Which type of annuity does the
monthly payments of a rental agreement form?

13.
With respect to when the
balance will be paid off, does it matter when, in the term, a lump sum payment
is made on the principal of a mortgage?

14.
Does skipping the 10th mortgage
payment have the same consequence to lengthening the amortization period as
skipping the 35th payment?

15.
Can loan payments form either a
general annuity or a simple annuity?

16.
To compare the economic values
of several alternative payments, can any point in time be chosen as the focal
date?

17.
In compound interest
calculations, the compounding factor (or accumulation factor) depends on which
2 of the 3 following factors: the principal, the periodic rate of interest, the
number of compounding periods in the term?

18.
In the present and future value
formulas for constant growth annuities, if k=0,
then are the formulas the same as those for ordinary annuities?

19.
At the same nominal rate of
interest, does a semiannually compounded rate have a lower or higher effective
rate than a monthly compounded rate?

20.
Can the size of size of regular
payments of a mortgage be changed?

21.
For an ordinary annuity with
semi-annual payments, if the payments began on October 1, 2012, when will the
seventh payment be made?

22.
If the prevailing market
interest rate increases, does the purchase price of an annuity decrease or
increase?

23.
When calculating the future
value of an annuity due, is the end date at the beginning or end of the last
payment interval?

24.
For a given n, PMT
and i, is the present value of a
deferred annuity the same as the present value of an ordinary annuity?

25.
Does a portability clause in
the mortgage agreement mean that a purchaser may acquire the existing
mortgage?

26.
In a deferred annuity, is the
original value or the future value used to calculate payments that commence at
the end of the deferral period?

27.
In loan amortization, does the
ratio of principal to interest in each equal payment increase or decrease with
time?

28.
Are the number of compoundings
per year (conversions) and number of payments per year equivalent in a general
annuity?

29.
Is there is a calculation for
the future value of a perpetuity?

30.
In solving an ordinary general
annuity calculation, what interest rate is used?

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