QUESTION: 697

What is the Net Present Value of this series of annual cash flows using an interest rate of 15% per year: Year
0: <$15,000>, Year 1: $5,000, Year 2: $8,000, Year 3: $11,000? (Note that the <> are used to indicate a negative number).

$2,589.11
$3,104.37
$2,981.21
$5,077.49
$2,629.65

Answer(s): E

Explanation:

On the BAII Plus, press CF 2nd CLRWork 15000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 8000 ENTER DownArrow DownArrow 11000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 15 ENTER DownArrow CPT. On the HP12C, press these keys: 15000 CHS BlueShift CFo 5000 BlueShift CFj 8000 BlueShift CFj 11000 BlueShift CFj Then press 15 i, YellowShift NPV. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.

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QUESTION: 698

How many monthly payments of $30, beginning next month, are needed to pay off a debt of $1,000, if interest accrues at 10% per year, compounded monthly?

No solution/Error
32.80
51.48
39.21
27.60

Answer(s): D

Explanation:

On the BAII Plus, press 10 divide 12 = I/Y, 1000 PV, 30 +/- PMT, 0 FV, CPT N. On the HP12C, press 10 ENTER 12 divide i, 1000 PV, 30 CHS PMT, 0 FV, n. Note that the HP12C will display 40 as the answer. Make sure the BAII Plus has the value of P/Y set to 1.

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QUESTION: 699

Management is considering adopting a bonus system to increase production. One suggestion is to pay a bonus on the highest 5 percent of production based on past experience. Past records indicate that, on the average, 4,000 units of a small assembly are produced during a week. The distribution of the weekly production is approximately normally distributed with a standard deviation of 60 units. If the bonus is paid on the upper 5 percent of production, the bonus will be paid on how many units or more?

None of these answers
3196
5120
4099
6255

Answer(s): D

Explanation:

We want the area 1.0 - 0.55 = 0.45. For this we have a z value of 1.645. Now, using z = (x-u)/sigma, we have 1.645 = (x-4000)/60. x = 4099.

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QUESTION: 700

A selected group of employees of Unique Buying Services is to be surveyed with respect to a new pension plan. In depth interviews are to be conducted with each employee selected in the sample.
The employees are classified as follows.

Classification Event Number of Employees
Supervisors A 120
Maintenance B 50
Production C 1,460
Management D 302
Secretarial E 68

What is the probability that the first person selected is classified as a maintenance employee?

0.025
0.50
None of these answers
0.20
1.00

Answer(s): A

Explanation:

There are 2000 employees of which 50 are from maintenance. So 50/2000 = 0.025.

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QUESTION: 697

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QUESTION: 698

Explanation:

QUESTION: 699

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QUESTION: 700

Explanation: