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1. The annual revenue-growth rates for a new tech startup during its first 4 yea

ID: 3111713 • Letter: 1

Question

1. The annual revenue-growth rates for a new tech startup during its first 4 years of operations were as follows: Year1 +50% Year2 +50% Year3 -50% Year4 -50% Rounded to the nearest tenth of one percent, the startup's 4-year Compound Annual Growth Rate was

-13.4%

0.0%

-25.0%

-10.50

None of the above

2. Suppose that next year the U.S. will be in one of the following economic conditions: Boom, Moderate Growth, Recession, or Depression. The probability that each economic condition will occur, and that a jewelry store will earn profits within that broader economic condition are listed below: Econ condition probability jewelry store profits Boom .40 $400,000 Moderate growth .30 $300,000 Recession .20 $100,000 Depression .10 -$500,000 The standard deviation of the jewelry store's profits next year (rounded to the nearest dollar) is

a)$102,442 b) $125,483 C)$149,873 d) $125,264 e) $263,818

3 .Suppose that the following cash flows are received: TIME Cash FLOW 0 -$500 1 $200 2 $200 3 $200 If cash flows are discounted at 10% per period, the net present value of those cash flows (rounded to the nearest cent) is

a)$2.39 b) $2.63 c) $5.12 d) $5.63 e) None of the above

4. What is the complete set of numbers for which f(x) = x3 + 2x2 - x is concave?

a)x 2/3 b) x 3/2 c) x 3/2 d)x 1 E)None of the above

5. Suppose that the following cash flows are received: TIME Cash FLOW 0 -$500 1 $200 2 $200 3 $200 The Internal Rate of Return on the cash flows (rounded to the nearest percent) is 12%

11%

10%

9%

8%

56. For x = 1/2 the second derivative of f(x) = 2x2 is

a)¾ b)100 c)192 d)25 e) None of the above

53.Evaluate 10 12 20 18 None of the above 51. Suppose that a total of $10 million will be allocated to the first three finishers in the Springfield Derby horse race in the ratio 7:2:1. The total amount received by the 2nd- and 3rd-place finishers in the race is

a)$7M b) $5M c)$3M d)$1M e)None Of the above

43. Suppose that next year the U.S. will be in one of the following economic conditions: Boom, Moderate Growth, Recession, or Depression. The probability that each economic condition will occur, and that a jewelry store will earn profits within that broader economic condition are listed below:

Econ condition probability jewelry stor profits

Boom .40 $400,000

Moderate growth .30 $300,000

Recession .20 $100,000

Depression .10 -$500,000

The expected profit of the jewelry store during the next year is

a)250,000 b)220,000 c)190,000 d)170,000 e)None of the above

41. The set of all values of x that satisfy 5(3 - x) 10 is expressed as

a)x 1 b)x 1 c)x 1 d)x 2 e)None of the above

38. The inflection point for f(x) = x3 - 3x2 + x + 5 is

a)X=0 b)X=1 c)X=-1 d)X=2 e)None of the above

Explanation / Answer

Solution:

Compound Annual Growth Rate was

=geomean(growth rate) - 1

= -12.4 -1 = -13.4 %

option (1) is correct