# Fall 2010 Final Exam Solution

Here are the final numerical results for each section of the exam.  You can use them to check your work if you do the exam for practice.  If you have trouble with the problems, or don't get the answers shown here, stop by during office hours or make and appointment and we can go over them.

### Question 4

PV of income = $160k; C0 =$96k; C1 = $80k; savings =$24k.

P = $322, Q = 178, Profit = 0. ### Question 6 Part A: P =$42; Q = 32; Profit = $1,024. Part B: PV of profits =$12,761; NPV = $4,761. Firm would undertake the project. Part C: Expected PV without the policy = -$1,619; with the policy = $250. Policy would change the firm's decision from no to yes. Note that with the policy,each year TR =$600 and TC = $300 so profits =$300.

URL: https://wilcoxen.maxwell.insightworks.com/pages/3265.html
Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 12/20/2010