MAT1092 – Midterm (50’) CODE A

Student’s full name (in Vietnamese):

Problem 1. A project requires an initial outlay of $90000 and produces a return of $60000 at the end of
year 1, and $R at the end of year 2.
a/ Determine the value of R if the internal rate of return is 10%.
b/ Given that R = 50000 and the market rate r = 8%, what is the net present value of the project.
Problem 2. A regular saving of $450 is made into a sinking fund at the start of each year for 16 years.
Determine the value of the fund at the end of the 16-th year on the assumption that the rate of interest is:
a/ 10% compounded annually;
b/ 10% compounded continuously.
Problem 3. The demand function for a firm’s domestic and foreign markets are:
P1 = 50 – 4Q1
P2 = 40 – 5Q2
and the total cost function is:
TC = 20 + 20Q, where Q = Q1 + Q2.
Determine the prices needed to maximize profit with price discrimination.

MAT1092 – Midterm (50’) CODE B

Student’s full name (in Vietnamese):
Problem1. The demand and supply functions of a good are given by:
P = -3QD + 48,
P = 0.5QS+ 23
a/ Find equilibrium quantity if the government imposes a fixed tax of $4 on each good;
b/ Find the corresponding value of the government’s tax revenue.
Problem2 . The prices of a good at the end of each year between 2004 and 2008 (with 2004 being the base
year) are listed in the table which also shows the annual rate of inflation:
year 2004 2005 2006 2007 2008
price 240 250 255 260 280
inflation 5% 3% 2% 4% 3%
If the index number of the real price for 2009 is 110 and the rate of inflation for that year is 4%, work out
the nominal value of the price in 2009.
Problem 3. A project requires an initial outlay of $80000 and produces a return of $50000 at the end of
year 1, and $R at the end of year 2.
a/ Determine the value of R if the internal rate of return is 12%.
b/ Given that R = 50000 and the market rate r = 8%, what is the net present value of the project.