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MSC 142 SEC 3 | Mid-term | 19 feb 2017 | Total marks 20

1) MSC Football club wants to buy new players. To come up with a systematic bid price
schedule, the management of the club decided that their bid price will depend on the players
performance (goals). The table below shows the number of goals each player scored in every
season.

PLAY SEASON SEASON SEASO SEASON SEASON 5 SEASON 6 BID


ER 1 2 N3 4 PRICE?
A 10 4 5 14 18 15 ?
B 12 16 5 5 9 9 ?
C 19 4 8 7 6 8 ?
D 20 19 18 7 12 15 ?
E 5 4 5 4 3 4 ?
F 9 13 9 14 19 7 ?
G 20 7 12 14 17 15 ?

a) Calculate the Bid price based on the following criteria: (5)

Bid
GOALS
price
average 15 goals or
5000
more
average 10 goals or
4000
more
average 5 goals or
3000
more
Less than 5 goals 0

b) Plot the bid price you found for each player on a column chart. (Bid price on Y
axis and player on x axis) (3)

2) You are given 3 projects to evaluate with the following cash flows:

period PROJEC PROJEC PROJECT


TA TB C
0 -18,000 -25,000 -31,000
1 12,000 14,000 17,000
2 16,000 22,000 25,000
3 14,000 18,000 20,000

As a manager, you want to know how the discount rates affect the NPV of each
project. Given the following discount rates, compute the NPV of each project (5)

Discount PROJEC PROJEC PROJECT


rate TA TB C
5%
7%
9%
11%
3) There are in total 65 types of industrial coolers found in a country. The following
table shows how many products each company produces:

comp types Market


any produced share?
voyag 15
e
delco 18
singer 11
daikin 13
tamri 8
n

a) Find the % market share of each company based on the number of types it
produces. (2.5)
b) Create a pie chart which shows market share on the Y axis and the company in X
axis (2.5)

4) If the NPV of a project is negative, which is true? (1)

a) The IRR is smaller than the discount rate

b) The required rate of return is smaller than IRR

c) The IRR is greater than the discount rate

5) Suppose cash flows of 5 projects with same duration are given and you can only
chose one. Based on some given discount rate, you found the NPV and chose one
project. Now, if the discount rates are changed, would your decision change? (1)

a) YES b) NO