EXAMMINATION 1
The 2013 NPUST-TNU MBA Program
Department of Business Administration
National Ping Tung University of Science and Technology
Student ID: Name: Nguyen Minh Hue (Victoria)

1. d
2. a
3. a
Feedback:
[pic]
In which: Co – Initial Invesment C - Cash Flow r - Discount Rate T - Time
=> [pic][pic] = - $59,000 + $22,272.7273 + $20,247.9339 + $21,412.4718 = $4,933.13
4. a
5. d
Feedback: CFo = $810,000 + $1,200,000 = $2,010,000
6. e
7. d
8. c
Feedback: Opportunity cost = $190,000 - $10,000 = $180,000
9. c
Feedback: OCF = Net income after tax + Depreciation = [EBIT x (1-T)] + [(Cost/Life) x T] = [($60,000 - $51,000) x (1-35%)] + [($40,000/4) x 35%] = $9,350
10. b
11. a
Feedback:
* If the required rate of return is 8%
[pic]
= $17,995.48
[pic]
= $11,045.50
=> At 8%, Project A has the higher NPV.
* If the required rate of return is 11%
[pic]
= -$2,362.80 (Negative)
[pic]
= $1,682.28
=> At 11%, Project B has the higher NPV.
So, my choice is to select project A at 8% and project B at 11%
12. c
13. c
Feedback: Tax = [$82,500 - $135,000 x (1 - .2 - .32 - .192)] x .34 = $14,830.80
14. c
Feedback:
Co (Initial Investment) = - $30,000 + $15,000 + $10,000 + $120,000 = $115,000
C4 (Cash Flow of 4th year) = $45,000 - $30,000 + $15,000 + $10,000 + $25,000 = $65,000
=> [pic] = $27,958.66
15. a
Feedback:
The accounting break-even level of production = [$12,760-($6000+$720)]/ 6.04 =$1000
16. a
Feedback
6.2x + 12,378= 16,700 ( x= 4,690( is break even) => 5000 units
17. c
Feedback:
[pic] = - $9,042.07 (Negative)
[pic]
= $1,279.52
=> Project B should be accepted and project A should be rejected.
18. e
Feedback: Because these are mutually exclusive projects, the IRR rule should not be applied.
19. b
Feedback:
[pic]
20. a