Sukkur I B A University

Department of Business Administration

Business Mathematics
Summer Course 2019

Class: BBA-I/III (A &F) Total: Marks 30

Teacher: Gul M Shaikh Mid Term Exam 2019
Time: 02 Hours Date: 25 -06-2019

Q: No# 01
The resale value V of a piece of industrial equipment has been found to behave according to the function

V  250,000 e 0.06t Where t= years since original purchase

(i) What was the original value of the piece of equipment?
(ii) What is the expected resale value after 5 years?
(iii) How long does it take for the resale value of the asset to reach 25 percent of its original value?
[05 Marks]

Q: No# 02

A company produces three products, each of which must be processed through three departments. Following
table summarizes the labor hours required per unit of each product in each department. The monthly labor
hour capacities for the three departments A,B and C are 1800 , 1450 and 1900 hours, respectively. Determine
whether there is a combination of three products which could be produced monthly so as to consume the full
monthly labor availabilities of all departments. [05 Marks]
Department Product 1 Product 2 Product 3
A 3 2 5
B 4 1 3
C 2 4 1

Q: No# 03
The demand function for a particular product is q = f(p) = 600,000 − 2,500p, where q is stated in units and
p is stated in dollars.

(i) Determine the quadratic total revenue function , where R is a function of p , or R = g(p)
(ii) What is the concavity of the function?
(iii) What is the p intercept of revenue function?
(iv) What does total revenue equal at a price of $50?
(v) How many units will be demanded at this price?
[05 Marks]

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Q: No# 04
The number of women in the labor force is expected to increase during the 1990s, but not as
dramatically as occurred during the 1970s. One forecasting consultant uses the linear equation n = 29.6 + 1.20t
to predict the number of women between the ages of 35 and 44 who will be in the labor force. In this equation, n
equals the number of women (aged 35-44) in the labor force ( measured in millions ) and t equals time measured
in years since 1981(t=0 corresponds to 1981). If n is plotted on the vertical axis:

(i) Graph the equation.

(ii) Identify the slope and n intercept.
(iii) Interpret the meaning of the slop and n intercept in this application.
(iv) Predict the number of women in this age group who will be in the labor force in 1995.In the year
2000.
[05 Marks]
Q: No# 05
Trust fund management:- A trust fund has $200,000 to invest. Three alternative investments have been
identified, earning 10 percent, 7 percent and 8 percent respectively. A goal has been set to earn an annual income
of $16,000 on the total investment. One condition set by the trust is that the one third combined investments in
alternatives 2 and 3 should be equal to the amount invested in alternative 1. Determine the amount of money
which should be invested in each option to satisfy the requirements of the trust fund. Solve by Gaussian
elimination method [05 Marks]

Q: No# 06
Portfolio Management:- An investor has consulted with a local investment expert. After talking with the
client the investment expert determines that the client is interested in a port folio which will have following
attributes

(i) Total value of the port folio at the time of purchase is $50,000
(ii) Expected annual growth in market value equals 12 percent, and
(iii) Average risk factor is 10 percent

Three investment alternatives have been identified with relative growth and risk rates as shown in the table

Investment Expected annual growth in Expected risk

market value

1 16 % 12 %

2 8% 9%

3 12 % 8%

Let 𝑥𝑗 defines the number of dollars invested in investment j. Determine the portfolio. [05 Marks]

WISH YOU GOOD LUCK

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