20 MCQ's

1) In 2010, Trucking Inc. had $1,250,000 in revenues and $1,013,000 in expenses. What are the Average and Marginal Tax rates respectively? (round to nearest whole percent)
a)  29% Average, 25% Marginal
b)  39% Average, 31% Marginal
c) 32% Average, 39% Marginal
d)  34% Average, 39% Marginal

2) Your are projecting Operating Revenues and Expenses of $200K and $130K respectively.
You are considering a project that would provide additional Revenues and Expenses of
$40K and $20K respectively.  What is the incremental tax rate of the project?
a) 29.54%
b) 17.86%
c) 20.94%
d) 31.75%

3) If your company's taxable income is $80,000 and state taxes are 6% and federal taxes are
34%, how much TOTAL TAXES do you owe?
a) $25,568
b) $30,368
c)  $32,000
d) $27,200

4) For a certain commodity, prices increase by 50% the first year and 30% the second year.
Determine the average inflation rate for this commodity over this two-year period.
a) 80.0%
b)  40.5%
c) 39.6%
d) 40.0%

1) The price of Gas is $3.39 in December 2011 and it was $4.10 in December 2008.  What is the average inflation rate for gas over these three years?
a)  6.14%
b)  5.77%
c)   -6.14%
d)   -5.77%

2) If you anticipate an annual inflation rate of 3.2% in the current economy, and can make an investment in a stock that is expected to appreciate at 12.0% compounded annually. What would be your inflation-free rate of return for this investment (pick the closest answer)?
a) 8.30%
b) 8.50%
c) 9.45%
d) 6.37%

3) A proposed project that requires an investment of $13,278 (year 0) is expected to generate a series of 4 equal annual net income of $6,000 each in constant dollars. Assuming the average inflation rate of 3.5%, and the market interest rate of 10% during this inflationary period, what is the equivalent net present worth (NPW) in actual dollars for this project?
a) $5,658
b) $7,380
c) $9,390
d) $7,277

4) Convert the Actual Dollar payment of $1,850 to be made 12 years from now into Constant Dollars to be made 12 years from now (given the inflation rate f = 3.5%, inflation-free interest rate i' = 7.5% annual).
a) $777
b) $514
c) $2,214
d) $1,224

1) BVM sold 25,000 units and was able to breakeven last year.  Variable costs will increase
30% next year.  What information is needed to calculate their new breakeven point?
a) Costs per unit
b) Sales price per unit and costs per unit
c) Total fixed costs, sales price per unit, and costs per unit
d)  No additional data is needed.

2) The probability distributions for NPW for two mutually exclusive alternatives are shown in the table. Assume the NPW random variables are independent.

a)  Project 2 is preferred because E[NPW2] < E[NPW1] and Var[NPW2] > Var[NPW1]. b)  Project 2 is preferred because P(NPW2  > NPW1) > 0.5.
c)  Both A and B are true.
d)  Neither A nor B is true.

3) Process A has fixed costs of $10,000 and unit costs of $4.50 each, process B has fixed costs of $25,000 and unit costs of $1.50 each.  At what production would the two processes have the same total costs?
a)  50 units
b)  500 units
c)  5,000 units
d)  50,000 units

4) Which of the following statements about scenario analysis is true?
a)  Only two cases, the best and the worst, are analyzed
b)  Only one variable is adjusted at a time
c)  Usually at least three cases are analyzed, worst, most likely, and best
d)  Selling price is not adjusted in any scenario because it is market driven

1) Sensitivity analysis is rarely done because the data used in most studies is very accurate.
a)  True
b)  False

2) Process A has fixed costs of $10,000 and unit costs of $4.50 each, process B has fixed costs of $25,000 and unit costs of $1.50 each.  At what production would the two processes have the same total costs?
a)  50 units
b)  500 units
c)  5,000 units
d)  50,000 units

3) For a certain commodity, prices increase by 50% the first year and 30% the second year.
Determine the average inflation rate for this commodity over this two-year period.
a) 80.0%
b)  40.5%
c) 39.6%
d) 40.0%

4) In 2010, Trucking Inc. had $1,250,000 in revenues and $1,013,000 in expenses. What are the Average and Marginal Tax rates respectively? (round to nearest whole percent)
a)  29% Average, 25% Marginal
b)  39% Average, 31% Marginal
c) 32% Average, 39% Marginal
d)  34% Average, 39% Marginal

1. (TCO 1) Block encoding takes several _____ and sends it out as a new code word. 
bytes
bits
wires
messages

2. (TCO 1) 1000 Mbps Ethernet uses _____ block encoding. 
4B/5B
differential
4D-PAM-5
PAM-5

3. (TCO 1) In NRZ, line encoding is a binary code where 1s are represented by _____ . 
absence of a signal
presence or level of a signal
a circular, sinusoidal signal
line block coding
 
4. (TCO 1) Digital signals are _____. 
discrete quantities
continuously varying quantities
based on block signaling
based on transmission errors