This quiz works best with JavaScript enabled. Home > Finance > Financial Analysis > Financial Modeling > Financial Modeling – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Modeling Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A company is likely to declare higher dividends if A) Tax rates are high. B) Tax rates are relatively lower. C) Tax rate has no effect on dividend declaration. D) None of the above. Show Answer Correct Answer: B) Tax rates are relatively lower. 2. What add-in program serves as the data analyzing tool in Excel? A) Analyse Tool Excel. B) Analyser Tool. C) Analysis ToolPak. D) Excel Analyse. Show Answer Correct Answer: C) Analysis ToolPak. 3. A firm anticipates that current growth projections for the next five years will require another RM80 million in funds to achieve. If the firm can generate RM30 million internally it will need to raise ..... in net new financing. A) RM30 million. B) RM40 million. C) RM25 million. D) RM50 million. Show Answer Correct Answer: D) RM50 million. 4. Retention Rate, which is (1-Payout Ratio), is also known as: A) Payout Ratio. B) Plowback Ratio. C) Pullout Ratio. D) Pushback Ratio. Show Answer Correct Answer: B) Plowback Ratio. 5. What is one advantage of preparing a cash budget? A) Higher credit rating. B) Knowing when cash my be idle & can therefore be invested. C) It makes doing the business annual tax return quicker. D) It is quick and easy to do. Show Answer Correct Answer: B) Knowing when cash my be idle & can therefore be invested. 6. Which of the following does not fall into financing activities? A) Share repurchases. B) Acquisitions. C) Dividends. D) Debt Issuance. Show Answer Correct Answer: B) Acquisitions. 7. Is depreciation cash? A) And. B) No. C) It depends. D) None of above. Show Answer Correct Answer: C) It depends. 8. XYZ Securities had a long-term stable debt-to-equity ratio of 0.65. Recentbank borrowing for expansion into North Luzon Expressway raised the ratio to 0.75.The increased leverage has what effect on the asset beta and equity beta of thecompany? A) The asset beta and the equity beta will both rise. B) The asset beta will remain the same and the equity beta will rise. C) The asset beta will remain the same and the equity beta will decline. D) None of the choices . Show Answer Correct Answer: B) The asset beta will remain the same and the equity beta will rise. 9. Canceling a long-term loan improves the company's liquidity A) Falso. B) TRUE. Show Answer Correct Answer: A) Falso. 10. Which of the following is NOT an advantage of using Financial Modeling and Forecasting in the financial services industry? A) Creating a roadmap for future investments. B) Understanding macro and micro economic events. C) Seeing the effects of a decision before investing. D) Gambling with company funds. Show Answer Correct Answer: D) Gambling with company funds. 11. Owner's equity is the owner's claim to the asset of the business. It is NEVER referred to as the owner's capital in the business. A) False. B) True. Show Answer Correct Answer: A) False. 12. What is a standard approach to calculating free cash flow? A) EBIT plus depreciation and amortization. B) Cash flow from operations less capital expenditures. C) Cash flow from operations plus depreciation and amortization. D) Net income plus depreciation plus change in working capital. Show Answer Correct Answer: B) Cash flow from operations less capital expenditures. 13. 4) If you wanted to replace the INDEX-MATCH formula, used in question 3 above, with a VLOOKUP formula, which of the following would yield the same result as the INDEX-MATCH formula, when entered into the highlighted cell in the screenshot above question 3? A) Format selected cells with bold, green font color, blue border lines. B) Insert a formula into a selected cell. C) Print a selected section of a worksheet. D) All of the above. Show Answer Correct Answer: D) All of the above. 14. Capital budgeting related to A) Long term assets. B) Short term assets. C) Long term assets and short term assets. D) Fixed assets. Show Answer Correct Answer: A) Long term assets. 15. ..... represents the short-term liabilities that a business owes to creditors. A) Accounting equation. B) Accounts payable. C) Financial statement. D) Owner's equity. Show Answer Correct Answer: B) Accounts payable. 16. Working Capital increases. Which of the following is false? A) Gross margin do not change. B) Cash flow from operating activities decreases. C) Cash increases. D) The income statement does not change. Show Answer Correct Answer: C) Cash increases. 17. When you set a budget, you should never revisit or adjust it. A) True. B) False. Show Answer Correct Answer: B) False. 18. Which of the following is an example of a non-current liability? A) A bank loan of $ 500, 000. B) Interest payable. C) Accounts payable. D) Bank overdraft. Show Answer Correct Answer: A) A bank loan of $ 500, 000. 19. We compute the profitability index of a capital budgeting proposal by A) Dividing the present value of the annual after-tax cash flows by the cost of capital. B) Multiplying the internal rate of return by the cost of capital. C) Dividing the present value of the annual after-tax cash flows by the cash investment in the project. D) Multiplying the cash inflow by the internal rate of return. Show Answer Correct Answer: C) Dividing the present value of the annual after-tax cash flows by the cash investment in the project. 20. Which of the following describes earnings per share? A) Shows the amount of earnings attributable to a share of common stock. B) Measures the value of common stock. C) The return on a share of common stock. D) Shows how much investors are willing to pay per dollar of earnings. Show Answer Correct Answer: A) Shows the amount of earnings attributable to a share of common stock. 21. The only balance sheet accounts a company has is cash of $ 850, 000, inventory of $ 50, 000. debt of $ 500, 000 and a building worth $ 100, 000. How much equity does the company have? A) $ 500, 000. B) $ 700, 000. C) $ 300, 000. D) $ 600, 000. E) $ 400, 000. Show Answer Correct Answer: A) $ 500, 000. 22. An organization purchases a tactor without financing. What impact does this purchase have on the balance sheet A) Property, plant, and equipment decreases and cash increases. B) Property, plant, and equipment increases and cash decreases. C) Property, plant, and equipment decreases and cash decreases. D) Property, plant, and equipment increases and cash increases. Show Answer Correct Answer: B) Property, plant, and equipment increases and cash decreases. 23. An Annual Report is issued by a company to its: A) Management. B) Directors. C) Shareholders. D) Auditors. Show Answer Correct Answer: C) Shareholders. 24. Investment in fixed assets improves the company's liquidity A) TRUE. B) Falso. Show Answer Correct Answer: B) Falso. 25. Which of the following is NOT a key element in creating effective financial models and forecasts? A) Understanding historical trends. B) Incorporating data forecasts. C) Understanding the economic environment. D) Using divine intervention. Show Answer Correct Answer: D) Using divine intervention. 26. A long term investment decision is called A) Financial decision. B) Dividend decision. C) Working capital decision. D) Capital budgeting decision. Show Answer Correct Answer: D) Capital budgeting decision. 27. Monthly fixed costs are Php 100, 000 excluding depreciation of Php 20, 000. Which figure should be shown in the Payments section of the cash budget? A) Php 100, 000. B) Php 120, 000. C) Php 80, 000. D) None of the others. Show Answer Correct Answer: A) Php 100, 000. 28. The discount rate that makes the net present value of an investment exactly equal to zero is called the: A) WACC. B) Internal rate of return. C) Average rate of return. D) External rate of return. Show Answer Correct Answer: B) Internal rate of return. 29. What is Financial Modeling and Forecasting? A) A process of using past data to predict future financial performance. B) A practice of exchanging and trading equities on a global scale. C) A process of hiding the details of financial transactions. D) A practice of finding Patterns within financial data. Show Answer Correct Answer: A) A process of using past data to predict future financial performance. 30. The cost of equity is equal to the: A) Expected market return. B) Rate of return required by stockholders. C) Cost of retained earnings plus dividends. D) Equity plus cost. Show Answer Correct Answer: B) Rate of return required by stockholders. ← PreviousNext →Related QuizzesFinancial Analysis QuizzesFinance QuizzesFinancial Modeling Quiz 1Financial Modeling Quiz 2Financial Modeling Quiz 4Financial Modeling Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books