This quiz works best with JavaScript enabled. Home > Financial Analysis > Financial Modeling > Financial Modeling – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Modeling Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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) $ 300, 000. B) $ 600, 000. C) $ 500, 000. D) $ 400, 000. E) $ 700, 000. Show Answer Correct Answer: C) $ 500, 000. 2. 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. 3. An Annual Report is issued by a company to its: A) Directors. B) Shareholders. C) Auditors. D) Management. Show Answer Correct Answer: B) Shareholders. 4. Investment in fixed assets improves the company's liquidity A) TRUE. B) Falso. Show Answer Correct Answer: B) Falso. 5. 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. 6. A long term investment decision is called A) Working capital decision. B) Capital budgeting decision. C) Financial decision. D) Dividend decision. Show Answer Correct Answer: B) Capital budgeting decision. 7. 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. 8. The discount rate that makes the net present value of an investment exactly equal to zero is called the: A) Internal rate of return. B) External rate of return. C) WACC. D) Average rate of return. Show Answer Correct Answer: A) Internal rate of return. 9. 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. 10. 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. 11. The percent of sales method assumes that as sales grow, many income statements and balance sheet items will grow proportional to sales. A) True. B) False. Show Answer Correct Answer: A) True. 12. What is the difference between a One-Dimensional Data Table and a Two-Dimensional Data Table? A) One-Dimensional and Two-Dimensional are different in the number of formulas and parameters they can handle. B) One-Dimensional performs sensitivity analysis by varying one formula using one parameter while Two-Dimensional does the same by changing two parameters. C) One-Dimensional performs sensitivity analysis by varying one formula using one parameter while Two-Dimensional varies two formula by changing two parameters. D) One-Dimensional and Two-Dimensional are the same with a difference in the number of formulas they can handle. Show Answer Correct Answer: B) One-Dimensional performs sensitivity analysis by varying one formula using one parameter while Two-Dimensional does the same by changing two parameters. 13. When an invoice is paid to an organization by a customer what is the balance sheet outcome? A) Revenue is increased and accounts receivable is reduced. B) Revenue is increased and accounts receivable is increased. C) Accounts receivable is increased and cash is reduced. D) Accounts receivable is reduced and cash is increased. Show Answer Correct Answer: D) Accounts receivable is reduced and cash is increased. 14. A ..... is a plan specifying how money will be used or spent during a particular period. A) Financial forecast. B) Financial plan. C) Accounting equation. D) Budget. Show Answer Correct Answer: D) Budget. 15. Which of the following presents the results of operations over a period of time? A) Working Capital Schedule. B) Equity Schedule. C) Cash flow statement. D) Balance sheet. E) Income Statement. Show Answer Correct Answer: E) Income Statement. 16. Investment can be defined. A) Person's dedication to purchasing a house or flat. B) Use of capital on assets to receive returns. C) Usage of money on a production process of products and services. D) Net additions made to the nation's capital stocks. Show Answer Correct Answer: B) Use of capital on assets to receive returns. 17. Which of the following is not a core building block of a robust financial model? A) Inputs. B) Interpretation. C) Processing. D) Outputs. Show Answer Correct Answer: B) Interpretation. 18. A Margin Typically shows a line item as a percentage of: A) Gross Profit. B) Net Income. C) Revenue. D) Enterprise Value. E) Cash. Show Answer Correct Answer: C) Revenue. 19. The ..... is a financial report that shows incoming and outgoing money during an accounting period (often a month, quarter, or year). A) Financial forecast. B) Financial plan. C) Statement of cash flows. D) Income statement. Show Answer Correct Answer: C) Statement of cash flows. 20. The Gross margin reflects the operational profitability of the business A) TRUE. B) Falso. Show Answer Correct Answer: B) Falso. ← PreviousNext →Related QuizzesFinancial Analysis QuizzesFinancial Modeling Quiz 1Financial Modeling Quiz 2Financial Modeling Quiz 3Financial Modeling Quiz 4Financial Modeling Quiz 6Financial Modeling Quiz 7Financial Modeling Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books