This quiz works best with JavaScript enabled. Home > Finance > Financial Analysis > Financial Modeling > Financial Modeling – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Modeling Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Market value of shares are decided by A) The investment market. B) The respective companies. C) The shareholders. D) The government. Show Answer Correct Answer: A) The investment market. 2. Which of the following is equal to real rate of return? A) Nominal Rate-Inflation Rate. B) Nominal Rate + Inflation Rate. C) Nominal Rate Inflation Rate. D) Nominal Rate x Inflation Rate. Show Answer Correct Answer: A) Nominal Rate-Inflation Rate. 3. 9) Where do you assign a Macro to a button on the Ribbon? A) In the Macros dialog box. B) In the Record Macro dialog box. C) In the Customize the Ribbon area of the Excel Options dialog box. D) Under the Insert tab on the Ribbon, select Insert Macro Icon. Show Answer Correct Answer: A) In the Macros dialog box. 4. Financial analysis becomes significant because it: A) Ignores price level changes. B) Measures the efficiency of business. C) Is effected by personal bias. D) Lacks qualitative analysis. Show Answer Correct Answer: B) Measures the efficiency of business. 5. Payback period rule accepts all projects for which the payback period is: A) An integer. B) Greater than the cut-off value. C) Less than the cut-off value. D) Positive. Show Answer Correct Answer: C) Less than the cut-off value. 6. Which of the following best describes the purpose of Financial Models & Forecasting in the financial services industry? A) To build financial statements. B) To predict stock prices. C) To identify new investment opportunities. D) To evaluate possible outcomes. Show Answer Correct Answer: D) To evaluate possible outcomes. 7. "Allows for the assumption that the firm will make large investments in capacity and will need new funding in large, infrequent financing rounds." This statement refers to the advantage of forecasting capital expenditures, working capital, and financing events directly. A) True. B) False. Show Answer Correct Answer: A) True. 8. When bad position of the business is tried to be depicted as good, it is known as A) Personal Bias. B) Price Level Changes. C) Window Dressing. D) All of the Above. Show Answer Correct Answer: C) Window Dressing. 9. How do calculate Days Receivable? A) Accounts Payable / Annual Revenue x 365. B) Accounts Payable / Cost of Sales x 365. C) Accounts Receivable x Annual Revenue / 365. D) Accounts Receivable / Cost of Sales x 365. E) Accounts Receivable / Annual Revenue x 365. Show Answer Correct Answer: E) Accounts Receivable / Annual Revenue x 365. 10. Under what condition would you NOT accept a project that has a positive net present value? A) If the project has a profitability index less than zero. B) If two or more projects are mutually inclusive. C) If the firm is limited in the capital it has available. D) If a project has more than one sign reversal. Show Answer Correct Answer: C) If the firm is limited in the capital it has available. 11. What is an example of cost of sales? A) Travel Costs. B) Raw material cost used in the production process. C) Management salaries. D) Interest expense. Show Answer Correct Answer: B) Raw material cost used in the production process. 12. The main inducer of EVA is WACC A) Falso. B) TRUE. Show Answer Correct Answer: A) Falso. 13. 5) What is the shortcut key for launching the Macros dialog box? A) Alt+M. B) Ctrl+F8. C) Ctrl+Shift+M. D) Alt+F8. Show Answer Correct Answer: D) Alt+F8. 14. Where can Financial Models & Forecasts be used to identify patterns in the data? A) Futures Markets. B) Money Markets. C) Equity Markets. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 15. The best financial models should (choose the best option from below) A) Keep things as simple as possible while provides sufficient detail for decision making. B) Offer users a high degree of detail and precision. C) Be easy to follow and audit. D) Be very simple and have the minimum level of detail. Show Answer Correct Answer: A) Keep things as simple as possible while provides sufficient detail for decision making. 16. If debt is reduced, what is the corresponding transaction on the balance sheet? A) Equity is increased. B) Cash is increased. C) Cash is reduced. D) Equity is reduced. Show Answer Correct Answer: C) Cash is reduced. 17. Which of the following statements regarding NPV is true? A) If NPV is positive, the project is expected to earn more than the firm's cost of capital. B) Accepting negative NPV projects will reduce shareholders' wealth. C) If the NPV is positive, the project's cost is less than the project's expected benefit. D) All of the above. Show Answer Correct Answer: D) All of the above. 18. The following are the advantages of net present value, EXCEPT A) It can be used as a rough screening device to eliminate those projects whose returns do not materialize until later years. B) All positive NPVs will increase the value of the firm. C) It allows comparison of benefits and costs in a logical manner. D) It recognizes the timing of benefits resulting from the project. Show Answer Correct Answer: A) It can be used as a rough screening device to eliminate those projects whose returns do not materialize until later years. 19. 10) While busy recording a macro, you made a mistake. What is the best course of action? A) You can pause the macro and click Rewind to fix it. B) You should re-record the macro. C) You should press Undo. D) None of the options listed above are correct. Show Answer Correct Answer: B) You should re-record the macro. 20. Which of the following items are included in a cash budget? A) Depreciation. B) Bad debts. C) Cash receipts. D) Accumulated depreciation. Show Answer Correct Answer: C) Cash receipts. 21. What are the keyboard shortcut keys to insert Excel function arguments automatically?* A) Ctrl + A. B) Ctrl + Shift + A. C) Ctrl + F3. D) Ctrl + Shift + K. Show Answer Correct Answer: C) Ctrl + F3. 22. What metric states what is available for distribution to creditors and shareholders? A) Cash flow from investing activities. B) Cash flow from financing activities. C) Net income. D) Free Cash Flow. E) Cash flow from operating activities. Show Answer Correct Answer: D) Free Cash Flow. 23. Variable expenses may not be the same every month. A) True. B) False. Show Answer Correct Answer: A) True. 24. How do you calculate operating margin? A) Operating Income / Revenue. B) Operating Expenses / Revenue. C) Operating Expenses / Operating Income. D) Net Income / Revenue. E) Gross Profit / Revenue. Show Answer Correct Answer: A) Operating Income / Revenue. 25. 1) Which of the descriptions listed below best describe what a macro in Excel does? A) It is a type of formatting you can apply to enlarge the worksheet area. B) It is a file type that you save a workbook as. C) It is a series of instructions contained in one command that you can use to automate complex and/or repetitive tasks. D) It is a recording function that allows you to save worksheets, audio recordings and videos that are displayed on the screen. Show Answer Correct Answer: C) It is a series of instructions contained in one command that you can use to automate complex and/or repetitive tasks. 26. The ..... is a report of the revenue, expenses, and net income or net loss over an accounting period. A) Financial statement. B) Accounts payable. C) Owner's equity. D) Income statement. Show Answer Correct Answer: D) Income statement. 27. The disadvantage of the IRR method is that A) The IRR deals with cash flows. B) The IRR gives equal regard to all returns within a project's life. C) The IRR will always give the same project accept/reject decision as the NPV. D) The IRR requires long, detailed cash flow forecasts.Answer:D. Show Answer Correct Answer: D) The IRR requires long, detailed cash flow forecasts.Answer:D. 28. If you want to generate values for a target output by changing multiple inputs and setting multiple constraints on the inputs, you should use the ..... function in Excel. A) Solver. B) Scenario. C) Data Table. D) Goal Seek. Show Answer Correct Answer: D) Goal Seek. 29. New machine costing Php 100, 000 is purchased in August with a 20% deposit and 8 monthly instalments starting in September. What is the value of the first instalment to be shown in the cash budget? A) Php 10, 000. B) Php 20, 000. C) Php 1, 000. D) Php 12, 000. Show Answer Correct Answer: A) Php 10, 000. 30. EBITDA stands for: A) Earnings Behalf of Interest, Taxes, Depreciationand Amortization. B) Earnings Before Interest, Taxes, Depreciation and Amortization. C) Earnings Before Income Taxes, Depreciation and Amortization. D) Earnings Between Interest, Taxes, Depreciation and Amortization. Show Answer Correct Answer: B) Earnings Before Interest, Taxes, Depreciation and Amortization. ← PreviousNext →Related QuizzesFinancial Analysis QuizzesFinance QuizzesFinancial Modeling Quiz 1Financial Modeling Quiz 3Financial Modeling Quiz 4Financial Modeling Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books