CME455 Assignments

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Homework assignments posted here are subject to correction in class or through other means.  Problems as assigned here are for your convenience but are not a substitute for obtaining assignments in class.  

Assignments as issued in class supersede these assignments unless otherwise noted.

Homework Assignment: 1 2 3 4 5 6 7 8 9 10 11

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Homework #1 (Due August 28, 2007)

Decision Time

From your textbook:
1.4, 1.6, 1.12, 1.16

Assignment Objectives:

bulletPractice making economically sound decisions (all)
bulletEvaluate economic problems without time as a consideration (all)
bulletConsider the role of probabilities of multiple outcomes in making economic decisions. (1.16)

Reading Assignments:

bulletThursday (8/23) Ch. 2 pp. 30-48 Time Value of Money, Probabilities
bulletTuesday (8/28) Ch. 2 pp. 48-55 HW 1 Due, HW2 Assigned
 
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Homework #2 (Due September 4, 2007)

The Most Interesting of All Homework

From your textbook:
2.5, 2.9, 2.15, 2.24, 2.28, 2.37, 2.41, 2.47

Additional Practice Problems:
2.8, 2.14

Assignment Objectives:

bulletDetermine present values, future values, and annual values of various cash flows
bulletUse fundamental interest formulae to solve economic problems
bulletApply interest rates to periods other than a year using effective interest rates

Reading Assignments:

bulletThursday (8/30) Ch. 2 pp. 55-65 Additional cash flow equivalencies
bulletTuesday (9/04) More equivalency problems 
HW 2 Due, HW3 Assigned
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Homework #3 (Due September 11, 2007)

This Might Be Even More Interesting, If Not for Inflation

From your textbook:
2.56, 2.59, 2.67, 2.73, 2.77, 2.80
3.1, 3.3, 3.6, 3.8

Note that the loan in problem 67 is $7000 as stated the first time in the problem, not $6000 as indicated later in the same statement. Foreign editions may or may not contain this typographical error.

Assignment Objectives:

bulletApply concepts of equivalence when comparing multiple options (2.56, 2.73, 2.77, 2.80)
bulletDetermine present values, future values, and annual values of various cash flows (2.59, 2.73, 2.77, 2.80)
bulletApply interest rates to periods other than a year using effective interest rates (2.67)
bulletCalculate continuously compounded interest (2.80)
bulletApply understanding of inflation to cost analysis (3.1, 3.3, 3.6, 3.8)

Reading Assignments:

bulletThursday (9/6) Ch. 3 pp. 97-105 Bonds
bulletTuesday (9/11) Ch. 4 pp. 108-127 Methods of comparison
HW 3 Due, HW 4 Assigned
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Homework #4 (Due September 18, 2007)

You Are A Financial Mogul In The Making

From your textbook:
3.9*, 3.15, 3.17, 3.21, 3.26
4.1, 4.6, 4.10, 4.15, 4.16

* Note that the year 2 labor cost in problem 3.9 should be $1500 instead of $15,000

Assignment Objectives:

bulletApply understanding of inflation to cost analysis (3.9)
bulletEvaluate cash flows with variable interest rates (3.9)
bulletPerform economic analyses of bond investments and loans (3.15, 3.17, 3.21)
bulletApply interest rates to periods other than a year using effective interest rates (3.21)
bulletAnalyze the mathematical properties of economic factors (3.26)
bulletAssess multiple opportunities using different methods of comparison, including PW, AW, FW, IRR, ERR, Ratios, and Payback (4.1, 4.6, 4.10)
bulletEvaluate capitalized cost (4.15, 4.16)

Reading Assignments:

bulletThursday (9/13) Ch. 4 pp. 128-134 Use of spreadsheets for comparison
bulletTuesday (9/18)  Ch. 5 pp. 143-154 Comparing alternatives
HW 4 Due, HW5 Assigned
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Homework #5 (Due September 25, 2007)

How To Be an Effective Speaker When Saying AW, ERR, FW, Etc.

From your textbook:
4.20, 4.23, 4.24, 4.27, 4.30

Assignment Objectives:

bulletAssess multiple opportunities using different methods of comparison, including PW, AW, FW, IRR, ERR, Ratios, and Payback (4.20, 4.23)
bulletEvaluate capitalized cost (4.24, 4.27)
bulletUtilize spreadsheets in economic calculations (4.30)

Reading Assignments:

bulletThursday (9/20) Ch. 5 pp. 143-176 Comparing alternatives
bulletTuesday (9/25)  Ch. 5 pp. 176-202 Supplementary Analyses
HW5 Due, HW6 Assigned
bulletThursday (9/27) Ch. 5 pp. 202-225 Analytical Conclusions
Stock Market Game Report 1 Due
bulletTuesday (10/02) EXAM 1 (chapters 1-4)
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Homework #6 (Due October 4, 2007)

For the sake of comparison...

From your textbook:
5.4,5.10, 5.13, 5.16, 5.20, 5.21, 5.27(a, b, c, h), 5.30

Assignment Objectives:

bulletDetermine cash flows for comparing systems of lifetimes using various planning horizons (5.4)
bulletDetermine viable alternatives and develop cash flow profiles for each alternative (5.10)
bulletDetermine the cost of funding and use it to develop a MARR (5.13, 5.16, 5.20)
bulletApply both ranking and incremental approaches to comparing alternatives using the PW, FW, AW, IRR, ERR, SIR, PB, and DPB methods (5.21, 5.27, 5.30)

Reading Assignments:

bulletThursday (9/27) Ch. 5 pp. 202-225 Analytical Conclusions
Stock Market Game Report 1 Due
bulletTuesday (10/02) EXAM 1 (chapters 1-4)
bulletThursday (10/04) Ch. 6 pp. 256-262 Depreciation
HW6 Due, HW7 Assigned
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Homework #7 (Due October 16, 2007)

You can’t say this assignment doesn’t compare...

From your textbook:
5.43, 5.45, 5.46, 5.70(a, c, f), 5.82, 5.86, 5.93, 5.98, 5.104

Assignment Objectives:

bulletApply breakeven analysis to time sensitive economic alternatives (5.43)
bulletApply sensitivity analysis to economic alternatives (5.45, 5.46)
bulletAnalyze systems involving no positive cash flows (5.70, 5.82, 5.86)
bulletApply the cash flow, outsider viewpoint, and optimum replacement interval approaches to replacement analysis (5.93, 5.98, 5.104)

Reading Assignments:

bulletThursday (10/04) Ch. 6 pp. 256-262 Taxes
bulletTuesday (10/09) Ch. 6 pp. 262-281 Depreciation
bulletThursday (10/11) Fall Break
bulletTuesday (10/16) Ch. 6 pp. 281-308 Taxes and Depreciation
HW7 Due, HW8 Assigned
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Homework #8 (Due October 23, 2007)

I hope you truly depreciate what this assignment does for you

From your textbook:
6.8, 6.13, 6.22, 6.26(a,b), 6.38, 6.41(a,b), 6.44, 6.58

Assignment Objectives:

bulletPrepare depreciation schedules using straight-line, declining balance, and SOY methods with and without switching (6.8)
bulletUtilize MACRS-GDS and ADS allowances to prepare depreciation schedules (6.13, 6.22)
bulletApply depreciation schedules to determine tax impact and construct ATCF schedules (6.26)
bulletDetermine tax liability for simple cases according to IRS rules (6. 38. 6.41, 6.44)
bulletCombine tax and inflation effects to determine ATCF and compare options using both TC and CW analysis (6.58)

Reading Assignments:

bulletThursday (10/18) Ch. 7 pp. 319-330 Public Project Analysis
bulletTuesday (10/23) Ch. 7 pp. 330-352 Benefit-Cost Analysis
HW8 Due, HW9 Assigned
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Homework #9 (Due October 30, 2007)

This Assignment is not a Public Project

From your textbook:
7.5, 7.9, 7.10, 7.19, 7.20, 7.24, 7.25

Assignment Objectives:

bulletUse benefit-cost analysis to compare alternatives (7.5, 7.9, 7.10, 7.19, 7.20, 7.24)
bulletUse cost-effectiveness analysis to compare alternatives (7.25)

Reading Assignments:

bulletThursday (10/25) Ch. 8 pp. 381-399 Accounting Principles, Stock Mid-Game Report Due
bulletTuesday (10/30) No class meeting, HW 9 Due, HW 10 Assigned
bulletThursday (11/01) Ch. 18 Eschenbach Uncertainty and Probability

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Homework #10 (Due November 13, 2007)

Make certain you account for all of your solutions

From your textbook:
8
.8, 8.9, 8.11, 8.17, 8.19, 8.21

Additional Recommended Problems:
8.14, 8.15, 8.20, 8.22

Assignment Objectives:

bulletApply costing and estimating principles to perform economic analyses (8.8, 8.15)
bulletDistinguish between fixed and marginal costs and use in economic analyses (8.9)
bulletOptimize profits using economic principles (8.11, 8.14)
bulletPrepare income statements and balance sheets to demonstrate understanding of basic accounting principles (8.17, 8.19)
bulletPerform calculations involving accounting measures of performance (8.20)
bulletDetermine appropriate selling price based on cost and production estimates (8.21)
bulletDetermine overhead rates for accounting purposes (8.22)

Reading Assignments:

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Tuesday (11/06)              No class meeting, AIChE Annual Meeting

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Thursday (11/08)                    No class meeting, AIChE Annual Meeting

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Tuesday (11/13)                      Ch. 18 Eschenbach Uncertainty and Probability, Decision Trees, HW 10 Due, HW 11 Assigned

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Homework #11 (Due November 29, 2007)

What are the chances you can get all of these correct?

From Eschenbach:
18.9, 18.12, 18.14, 18.15, 18.20, 18.24, 18.25

Assignment Objectives:

bulletEvaluate alternatives accounting for probabilistic descriptions of outcomes and risk (18.9, 18.12, 18.14, 18.15, 18.20)
bulletUse decision trees in evaluating alternatives (18.24, 18.25)
bulletUse the efficient frontier to compare alternatives (18.25)

Reading Assignments:

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Thursday (11/15)                    Monte Carlo Simulations

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Tuesday (11/20)                      Exam 2, Chapters 5-8

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Thursday (11/22)                    No class meeting, Thanksgiving

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Tuesday (11/27)                      Simulations in Excel

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Thursday (11/29)                    Simulation Workshop, HW 11 Due

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Tuesday (12/04)                      Project Presentation

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Thursday (12/06)                    Excel Team Exercise, Final Stock Game Report Due

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Friday (12/07)                         Project Report Due

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Thursday (12/13)                    Comprehensive Final Exam                10:45-12:45

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