Your class has reached the following scores (on a scale of twenty points) in the first
test exam in October, with nineteen of you participating.
14; 12; 16; 11; 14; 11; 11; 20; 12; 13; 13; 16; 19; 14; 17; 14; 9; 12; 13:
Required
(i) Present the data in a histogram using classes 8-9; 10-11; : : : ; 18-19; 20-21.

(ii) What is the median exam score? What is the upper quartile score and the lower
quartile score?

(iii) What are the range and the inter-quartile range of the scores?
(iv) Display the above data using a box plot and briefly comment on the result.

(b) A class has written two exams, namely a Quantitative Techniques exam with an
average score 71 and standard deviation 7 and a Qualitative Techniques exam with an
average score 67 and standard deviation 4. Out of the two stacks of exam copies, the
paper of one student is drawn at random and then the student’s name is searched and
found in the other stack. Assume the scores obtained by students in each exam are
independent of each other.
QUESTION TWO
Temple Ltd is currently considering a programme of expansion through purchase of new plant
equipment. Two mutually exclusive investment projects have been identified as potential means
of achieving this. The following information has been collected regarding the two projects:
Project 1 Project 2
£ £
Initial Investment 200,000 150,000
Expected profit per annum:
Year 1 30,000 10,000
Year 2 25,000 12,000
Year 3 25,000 12,250
Year 4 22,500 25,000
Year 5 17,500 35,000
Estimated residual value 10,000 7,500
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FIN5B1 Quantitative Analysis for Finance and Investment – Coursework 2017-2018
Temple Ltd has a scrap 12% cost of capital and its maximum payback period is 4 years. The
company uses the straight-line method of depreciation for all fixed assets when calculating net
profit. Neither project would affect the working capital of the business.
Required
a) Calculate the payback period and Net Present Value for both projects.
b) Write a memo to the Board of Temple Ltd advising which project ABC should accept,
stating clearly your reasons.
c) For the project you have chosen as the best investment calculate the Internal Rate of
Return and explain what the IRR represents.

QUESTION THREE
A Dubai-based media company is trying to decide whether to bid for a major TV advertising
contract. In the past the company’s main competitor, based in Abu Dhabi, has submitted bids
70% of the time. If the Abu Dhabi competitor does not bid then the probability that Dubai
Media will get the job is 0.5. If the Abu Dhabi competitor does bid then the probability that
Dubai Media will get the job is 0.25.
(a) If the Dubai-based company gets the job, what is the probability that the Abu Dhabi
company did not bid?
(b) What is the probability that the Dubai-based company will get the job?