Faculty of Economics and Business Administration
Exam: Finance and Financial Arithmetic 1.5 (BK & IBA)
Code: E_BK1_FFA / E_IBA1_FFA
Co-ordinator: Ir F.W. van den Berg mba
Date: Wednesday July 3rd , 2013
Time: 12.00 – 14.00 hr.
Duration: 2 hours
Graphical calculator?: Yes
Number of questions: 40
Type of questions: Multiple choice
Answer in n.v.t. / not relevant (MC questions)
Remarks:
Remarks: The exam is closed book. Also no formula sheet (or whatever) is allowed.
Fill in your name and student number very clearly (from the MC answer page this will be machine read).
Be very precise in writing numbers like 1 or 7; 0 or 6 or 9; 3 or 8 etc. Unclear? no grade!
Fill the MC answers in on the separate MC answer sheet. If messy no grade, fill in new form then.
Do NOT fill in like: X or V ; indicate the answer with clear “balls”, make them 100% black or blue: … •
…
The
student has to
Do NOT mess uphand back the the
the “balloons”, complete
answer exam (alltopages)
sheet has upon read
be machine finishing
it.
Credit score: Tentatively: (number of correct questions minus 8) x 0,3125 = grade. Adjustment for
guessing element in the MC questions is made; e.g. 26 correct (26 - 8) x 0,3125 = 5,6.
Depending on results adjustment may be made. Extra credit (30%) may be awarded if
participated with positive result in MyFinanceLab tests (with min. grade for this exam: 4,5).
Grades: The grades will be mailed to the Studie-secretariaat: July 17th .
Inspection: At request by mail to instructor
Number of pages: 9 (including front page)
Please, do not email the instructor about grades ask “Studie-secretariaat”
All exams, used and unused, to be handed in.
FFA 1.5 – 3/07/2013
, In principle, the American notation as in the book is being used: thus e.g. 3.29% and $1,008.23.
The answers are in telegram style and only about calculations.
If “problems” persist, ask a fellow student for an explanation.
Your instructor is not able to answer mails of 500 – 600 students.
Most of these questions have been discussed - one way or the other - by de instructor during the lectures.
That’s why we teach you, and give these lectures.
You should have directed your questions about problems to your lecturer during these instruction
lectures.
I gave you the opportunity to attend 12 x 2 hours of lectures (but most of you were not there and choose
to do other things …..!!).
The VU is not (yet?) some kind of a “digital” university.
So next time, next year: show up !!!
1) You have a share with dividend last year of 1, dividend this year of 1,50, dividend the year thereafter of 2. From
thereon growth is expected to be 10%. The expected shareholders rate of return is 15%. What is the share price
according to the DDM:
a. 30
b. 36,08 = 1.50/1.15 + 2/(.15-.1)/1.15
c. 39,50
d. 31,38
e. 40
2) You have taken a 10 year $ 250.000 mortgage on a house at an interest rate of 7% per year. The mortgage calls for 10
equal annual payments (at the end of the year). What is the principal repayment at the end of the second year?
A) $ 18.094
B) $ 25.000 For each question: indicate the closest or best possible answer.
C) $ 20.716
D) $ 19.361 pmt = 35,594.38 ; repayment = 1.07 x (35,594.38 - 0.07 x 250.000)
E) $ 35.594
3) Hammond Motors had sales of $40 million in 2009 with a cost of goods sold of $25 million. A simplified balance
sheet for Hammond appears below:
Hammond's cash conversion cycle in 2009 is closest to:
A) 22 days
B) 44 days
C) 56 days For each question: always fill in something, your best guess……
D) 66 days
E) 39 days = (4.2/40 + 3/25 - 1.8/25) x 365
FFA 1.5 – 3/07/2013
Exam: Finance and Financial Arithmetic 1.5 (BK & IBA)
Code: E_BK1_FFA / E_IBA1_FFA
Co-ordinator: Ir F.W. van den Berg mba
Date: Wednesday July 3rd , 2013
Time: 12.00 – 14.00 hr.
Duration: 2 hours
Graphical calculator?: Yes
Number of questions: 40
Type of questions: Multiple choice
Answer in n.v.t. / not relevant (MC questions)
Remarks:
Remarks: The exam is closed book. Also no formula sheet (or whatever) is allowed.
Fill in your name and student number very clearly (from the MC answer page this will be machine read).
Be very precise in writing numbers like 1 or 7; 0 or 6 or 9; 3 or 8 etc. Unclear? no grade!
Fill the MC answers in on the separate MC answer sheet. If messy no grade, fill in new form then.
Do NOT fill in like: X or V ; indicate the answer with clear “balls”, make them 100% black or blue: … •
…
The
student has to
Do NOT mess uphand back the the
the “balloons”, complete
answer exam (alltopages)
sheet has upon read
be machine finishing
it.
Credit score: Tentatively: (number of correct questions minus 8) x 0,3125 = grade. Adjustment for
guessing element in the MC questions is made; e.g. 26 correct (26 - 8) x 0,3125 = 5,6.
Depending on results adjustment may be made. Extra credit (30%) may be awarded if
participated with positive result in MyFinanceLab tests (with min. grade for this exam: 4,5).
Grades: The grades will be mailed to the Studie-secretariaat: July 17th .
Inspection: At request by mail to instructor
Number of pages: 9 (including front page)
Please, do not email the instructor about grades ask “Studie-secretariaat”
All exams, used and unused, to be handed in.
FFA 1.5 – 3/07/2013
, In principle, the American notation as in the book is being used: thus e.g. 3.29% and $1,008.23.
The answers are in telegram style and only about calculations.
If “problems” persist, ask a fellow student for an explanation.
Your instructor is not able to answer mails of 500 – 600 students.
Most of these questions have been discussed - one way or the other - by de instructor during the lectures.
That’s why we teach you, and give these lectures.
You should have directed your questions about problems to your lecturer during these instruction
lectures.
I gave you the opportunity to attend 12 x 2 hours of lectures (but most of you were not there and choose
to do other things …..!!).
The VU is not (yet?) some kind of a “digital” university.
So next time, next year: show up !!!
1) You have a share with dividend last year of 1, dividend this year of 1,50, dividend the year thereafter of 2. From
thereon growth is expected to be 10%. The expected shareholders rate of return is 15%. What is the share price
according to the DDM:
a. 30
b. 36,08 = 1.50/1.15 + 2/(.15-.1)/1.15
c. 39,50
d. 31,38
e. 40
2) You have taken a 10 year $ 250.000 mortgage on a house at an interest rate of 7% per year. The mortgage calls for 10
equal annual payments (at the end of the year). What is the principal repayment at the end of the second year?
A) $ 18.094
B) $ 25.000 For each question: indicate the closest or best possible answer.
C) $ 20.716
D) $ 19.361 pmt = 35,594.38 ; repayment = 1.07 x (35,594.38 - 0.07 x 250.000)
E) $ 35.594
3) Hammond Motors had sales of $40 million in 2009 with a cost of goods sold of $25 million. A simplified balance
sheet for Hammond appears below:
Hammond's cash conversion cycle in 2009 is closest to:
A) 22 days
B) 44 days
C) 56 days For each question: always fill in something, your best guess……
D) 66 days
E) 39 days = (4.2/40 + 3/25 - 1.8/25) x 365
FFA 1.5 – 3/07/2013
