7/13/2015

YourResultsfor"MultipleChoice"

YourResultsfor:"MultipleChoice"

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SiteTitle: MScManagementProgramme

SummaryofResults

BookTitle: MscManagementReadings

100%Correctof10Scoreditems:

BookAuthor: Muir

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LocationonSite: Operationsmanagement>AppendixJ>Self
StudyQuizzes>MultipleChoice

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Date/Time July13,2015at3:25PM(UTC/GMT)
Submitted:

1.

WhichofthefollowingfactorsplaysNOimmediateroleinthecalculationofthefuturevalueofan
investment?
YourAnswer: Theinternalrateofreturn

CORRECT.

2.

IdentifythefactorinvolvedinthedeterminationoftheNetOperatingIncome,whichisNOTa
legitimatecashflowitem.
YourAnswer: Depreciation

CORRECT.

3.

TheoperationsmanagerofWeasleyEnterprisesmustcalculatedepreciationonaproposedindustrial
equipmentorderwhichofthefollowingstatementsisTRUEifMACRSisused?
YourAnswer: ThefirmwillreceivelargertaxdeductionsunderMACRSthanunderstraightline
depreciation.

CORRECT.

4.

Acompanyproposedaninvestmentincapitalequipmentof$14,500withahurdlerateof16%.
Theiranalysisoftheinvestmentproducedthefollowingtotalcashflowintheindicatedyears.

YEAR
TotalCashFlow(NOI+D)

2005
2006
2007
2008
2009
$5,600 $6,750 $6,400 $7,500 $9,025

Whendoespaybackoccur?
YourAnswer: During2007

CORRECT.

5.

Acompanyproposedaninvestmentincapitalequipmentof$14,500withahurdlerateof15%.
Theiranalysisoftheinvestmentproducedthefollowingtotalcashflowintheindicatedyears.

YEAR
TotalCashFlow(NOI+D)
PresentValueFactors
http://wps.pearsoned.co.uk/wps/grader

2005
2006
2007
2008
2009
$5,600 $6,750 $6,400 $7,500 $9,025
0.8621 0.7432 0.6407 0.5523 0.4761
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7/13/2015

YourResultsfor"MultipleChoice"

WhatistheNetPresentValueoftheproject?
YourAnswer: $7,884

CORRECT.

6.

Acompanyproposedaninvestmentincapitalequipmentof$14,500withahurdlerateof15%.Its
analysisoftheinvestmentproducedthefollowingtotalcashflowintheindicatedyears.

YEAR
TotalCashFlow(NOI+D)
PresentValueFactors

2005
2006
2007
2008
2009
$5,600 $6,750 $6,400 $7,500 $9,025
0.8621 0.7432 0.6407 0.5523 0.4761

WhatistheInternalRateofReturnoftheproject?(Selectanappropriaterangeofdiscountrates.)
YourAnswer: >=34%

CORRECT.

7.

ExoticProducts,Inc.plansajointventureforafiveyearresearchanddevelopmentactivity.Ithas
agreedtocontribute$250,000peryeartowardtheeffort.Howmuchmustitpayforanannuityat
10percentinteresttomeetitsobligation?
YourAnswer: $947,700

CORRECT.

8.

AmediumsizedfirmofferingWebdevelopmentservicesprojectedacashsurplusof$1,500,000.It
hasidentifiedaninvestmentwithanannualinterestrateof8.5%foratwoyearinvestment.How
muchcashwillbeavailablewhentheinvestmentmatures?
YourAnswer: $1,765,837

CORRECT.

9.

Whatisoneriskofmanagingbythenumbers?
YourAnswer: longtermbenefitsmaybeforegoneforinvestmentsthatyieldquickresults.

CORRECT.

10.

Whichofthesestatementsaboutdepreciationisbest?
YourAnswer: Depreciationactsasataxshield.

CORRECT.

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