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PAN AFRICA CHRISTIAN UNIVERSITY
BACHELORS OF BUSINESS LEADERSHIP
END OF TERM EXAMINATION- V.R
DEPARTMENT: BUSINESS
COURSE CODE: BUS 2113
COURSE TITLE: BUSINESS MATHEMATICS
CAMPUS: VALLEY ROAD
EXAM DATE: FRIDAY 1ST 2016
TIME: 1800HRS – 2100HRS
INSTRUCTIONS
Answer only five questions
2
Question one.
(a) Explain the terms given below:
(i) Net Present Value (NPV)
(3 Marks)
(ii) Internal Rate of Return (IRR)
(3 Marks
(b) Global Enterprises is considering two projects. Each requires an initial outlay of
100,000 and provides the following expected year-end cash flows. The firm requires
a10 percent rate of return on each project.
Project A
Year
0
1
2
Cash flows −100,000 30,000 40,000
Project B
Year
0
Cash flows -100,000
1
2
40,000 30,000
3
50,000
3
30,000
4
60,000
4
20,000
Using Net Present Value method, determine the project to be accepted and implemented.
(14 Marks)
Question two.
a) Write down the elements of the following:
(i)
Set A; Set of numbers less than 99 which are divisible by 9
(ii)
Set B; Set of the squares of all whole numbers between 0 and 10.
(3 marks)
(3 marks)
(b) Show the set and elements of the following;
(i)
AnB
(ii)
AuB
(2 marks)
(2 marks)
(c ) Write down two subsets each for set A and B.
(4 marks)
(d ) Draw Venn diagrams to show the relationship between the following pairs of sets:
i)
Set of odd numbers; set of prime numbers
(2 marks)
ii)
Set of numbers divisible by two; set of numbers divisible by three. (2 marks)
iii)
Set of even numbers; set of odd numbers
(2 Marks)
Question three.
(a) Explain the meaning of following terms;
3
(i)
(ii)
(iii)
(iv)
Arithmetic progression.
Geometric progression.
Common difference
Common ratio
(b) (i) For the progression 48, 40, 32, 24… find the 20th term.
(2 Marks)
(2 Marks)
(2 Marks)
(2 Marks)
(4 Marks)
(ii ) For the progression in (b) (i) above, find the sum of the first 20 terms.
(4 Marks)
(c ) For the progression 3,12,48,192… find the sum of the first 8 terms.
(4 Marks)
Question four.
(a) Differentiate straight line depreciation from reducing balance depreciation.
(4 Marks)
(b) A special council amenity costs Ksh 500,000 and its useful life is planned over 25 years.
If the reducing balance depreciation method is used at 10% rate, Calculate the book value
of the amenity at the end of its life?
(10 Marks)
(c) A company’s special computer suit which cost Ksh 20,000 to construct appreciates at
5 % (compound). Calculate the book value of the suit after 5 years.
(6 Marks)
Question five.
(a) Differentiate simple interest from compounded interest.
(2 Marks)
(b) Ksh 1200 is invested at 12.5% simple interest. Calculate the amount accrued after 3
years.
(6 Marks)
(c) A firm invests Ksh 4000 per year (at the end of every year) at 8% compound to meet a
fixed commitment at a particular time. If the commitment is Ksh 15,000 to be paid in
exactly three years from now, calculate the single sum invested now needs to be added in
order to meet the commitment.
(12 Marks)
Question six.
(a) Graph each of the following equations on the same diagram.
(i) y = x + 2
(3 Marks)
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(ii) y = 4x – 7
(iii) Use the graph to solve the equation x + 2 = 4x – 7
(iv) Graph the equation x + y = 4
(3 Marks)
(2 Marks)
(4 Marks)
(b ) Use the method of elimination to find the values of x and y that satisfy the following
simultaneous equations.
(i) x + y = 4
3x - y = 8
(4 Marks)
(ii) 3x + 2y = 19
3x – 3y = -6
(4 Marks)