$($a $-2$ pts$)$ A bank is offering you a Credit Card with a nominal annual interest rate of $19\mathrm{.}99\%$ compounded

continuously. What is the effective annual interest rate that you are actually going to pay...?

$i=$

$($b $-6$ pts$)$ We can conclude that Project A is economically better than Project B if: $($consider each row

independently, circle TRUE or FALSE$]$

$(\frac{B}{C}{)}_A>1>(\frac{B}{C}{)}_B$

PWA$($@MARR$)$ PW $($@MARR$)$

MARR

$(c-2pts)$ What $is$ the mid$-$year convention for MACRS depreciation method? $[Circle$ one$]$

All cash flow transactions are assumed $to$ occur $in$ the middle $of$ the year and not $at$ the end, $as$

usually done $(endof$ the period convention$).$

All depreciation amounts need $tobe$ paid after $6$ months $(endof$ June$)$

Taxes needs $tobe$ paid after $6$ months $(endof$ June$)$

Assets are all assumed $to$ being utilized $6$ months only $in$ the first year.

$(d-2pts)$ What $is$ a sunk cost? $[Circle$ one$]$

A cost that can $be$ avoided

The cost $ofan$ old sink

$2$ A depreciation method used $to$ calculate the taxable income

$An$ incurred cost that cannot $be$ recovered anymore

A cost that will occur $so$ far $in$ the future that can $be$ now ignored