Question 1

Depreciation needs to be _____ the cash flow in each year to calculate taxes for that year.

Accepted Answer

A)  added to 
B)  subtracted from 
C)  either a or b 
D)  neither a nor b 
A)  added to 
B)  subtracted from 
C)  either a or b 
D)  neither a nor b B

Question 2

In the function =IPMT(B$3/B$5,A11,B$4*B$5,B$2,B$6,0), the entry "B$6" represents the ____.

Accepted Answer

A)  rate 
B)  per 
C)  pv 
D)  fv 
A)  rate 
B)  per 
C)  pv 
D)  fv D

Question 3

MATCHING
Identify the letter of the choice that best matches the word or phrase.
-Interest that is paid solely on the amount of the original principal value

Accepted Answer

A) simple interest 
B) principal 
C) interest 
D) compound interest 
E) balloon payment
F)cash flow 
A) simple interest 
B) principal 
C) interest 
D) compound interest 
E) balloon payment
F)cash flow A

Question 4

If you are calculating a positive future value (money being withdrawn from a bank, which is a positive cash flow), your formula requires a negative ____.

Accepted Answer

A)  present value (pv) 
B)  payment (pmt) 
C)  present value (pv) and payment (pmt) 
D)  any of the above 
A)  present value (pv) 
B)  payment (pmt) 
C)  present value (pv) and payment (pmt) 
D)  any of the above

Question 5

The depreciation method that computes depreciation at an accelerated rate with depreciation being highest in the first period and decreasing in successive periods is ____.

Accepted Answer

A)  variable-declining balance 
B)  fixed-declining balance 
C)  sum of the years digits 
D)  double-declining balance 
A)  variable-declining balance 
B)  fixed-declining balance 
C)  sum of the years digits 
D)  double-declining balance

Question 6

Interest that is paid solely on the amount of the original principal value is called ____________________ interest.

Accepted Answer

The answer of Interest that is paid solely on the...

Question 7

NPV requires that value1, value2, value3, and so on must be equally spaced in time and occur at ____.

Accepted Answer

A)  the end of each period 
B)  the end of the year 
C)  the beginning of each period 
D)  the beginning of the year 
A)  the end of each period 
B)  the end of the year 
C)  the beginning of each period 
D)  the beginning of the year

Question 8

What is the correct syntax of the PMT function? Briefly describe each of the arguments associated with this function.

Accepted Answer

Correct syntax:=PMT(rate,nper,pv,[fv],[t

Question 9

Corporate taxes allow companies to allocate portions of the capital investment as an expense, thereby reducing the amount of taxes owed.

Accepted Answer

A) True 
 B)False

Question 10

A house that costs $200,000 and requires a 10% down payment would have an original loan value (pv) of ____.

Accepted Answer

A)  $180,000 
B)  $190,000 
C)  $210,000 
D)  $220,000 
A)  $180,000 
B)  $190,000 
C)  $210,000 
D)  $220,000

Question 11

The values argument in the IRR function is a list of positive and negative cash flows. _________________________

Accepted Answer

A) True 
 B)False

Question 12

The RATE function syntax is as follows: =RATE(nper,pmt,pv,fv,____________________,[guess]).

Accepted Answer

The answer of The RATE function syntax is as follows:...

Question 13

MATCHING
Identify the letter of the choice that best matches the word or phrase.
-The value of the loan or investment

Accepted Answer

A) simple interest 
B) principal 
C) interest 
D) compound interest 
E) balloon payment
F)cash flow 
A) simple interest 
B) principal 
C) interest 
D) compound interest 
E) balloon payment
F)cash flow

Question 14

MATCHING
Identify the letter of the choice that best matches the word or phrase.
-Cash amounts paid or received

Accepted Answer

A) simple interest 
B) principal 
C) interest 
D) compound interest 
E) balloon payment
F)cash flow 
A) simple interest 
B) principal 
C) interest 
D) compound interest 
E) balloon payment
F)cash flow

Question 15

After the ____ and depreciation have been deducted, taxes can be calculated.

Accepted Answer

A)  interest expense 
B)  assets 
C)  liabilities 
D)  all of the above 
A)  interest expense 
B)  assets 
C)  liabilities 
D)  all of the above

Question 16

____ is preferred by most financial theorists because it uses the expected cash flows and applies a minimum rate of return to discount these cash flows into current (present) value dollars.

Accepted Answer

A)  NPV 
B)  EPS 
C)  EPP 
D)  IRR 
A)  NPV 
B)  EPS 
C)  EPP 
D)  IRR

Question 17

Payments that are inflows should be ____________________, and payments that are outflows should be negative.

Accepted Answer

The answer of Payments that are inflows should be ____________________,...

Question 18

Interest that is paid solely on the amount of the original principal value is called ____ interest.

Accepted Answer

A)  simple 
B)  complex 
C)  compound 
D)  principal 
A)  simple 
B)  complex 
C)  compound 
D)  principal

Question 19

Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below.
-Applying the IRR function to the worksheet in cell B39, Natalie writes the formula ____.

Accepted Answer

A)  =IRR(B24:G24) 
B)  =IRR(B27:G27) 
C)  =IRR(C30:C38) 
D)  =IRR(C39) 
A)  =IRR(B24:G24) 
B)  =IRR(B27:G27) 
C)  =IRR(C30:C38) 
D)  =IRR(C39)

Question 20

The PMT function finds the value of the payment per period, assuming that there are constant payments and a constant interest rate for the duration of the loan.

Accepted Answer

A) True 
 B)False

Depreciation needs to be _____ the cash flow in each year to calculate taxes for that year.

In the function =IPMT(B$3/B$5,A11,B$4*B$5,B$2,B$6,0), the entry "B$6" represents the ____.

MATCHING Identify the letter of the choice that best matches the word or phrase. -Interest that is paid solely on the amount of the original principal value

If you are calculating a positive future value (money being withdrawn from a bank, which is a positive cash flow), your formula requires a negative ____.

The depreciation method that computes depreciation at an accelerated rate with depreciation being highest in the first period and decreasing in successive periods is ____.

Interest that is paid solely on the amount of the original principal value is called ____________________ interest.

NPV requires that value1, value2, value3, and so on must be equally spaced in time and occur at ____.

What is the correct syntax of the PMT function? Briefly describe each of the arguments associated with this function.

Corporate taxes allow companies to allocate portions of the capital investment as an expense, thereby reducing the amount of taxes owed.

A house that costs $200,000 and requires a 10% down payment would have an original loan value (pv) of ____.

The values argument in the IRR function is a list of positive and negative cash flows. _________________________

The RATE function syntax is as follows: =RATE(nper,pmt,pv,fv,____________________,[guess]).

MATCHING Identify the letter of the choice that best matches the word or phrase. -The value of the loan or investment

MATCHING Identify the letter of the choice that best matches the word or phrase. -Cash amounts paid or received

After the ____ and depreciation have been deducted, taxes can be calculated.

____ is preferred by most financial theorists because it uses the expected cash flows and applies a minimum rate of return to discount these cash flows into current (present) value dollars.

Payments that are inflows should be ____________________, and payments that are outflows should be negative.

Interest that is paid solely on the amount of the original principal value is called ____ interest.

Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below. -Applying the IRR function to the worksheet in cell B39, Natalie writes the formula ____.

The PMT function finds the value of the payment per period, assuming that there are constant payments and a constant interest rate for the duration of the loan.

Applying Fundamental Excel Skills and Tools in Problem Solving

Solving Problems with Statistical Analysis Tools

Determining Effective Data Display with Charts

Applying Logic in Decision Making

Retrieving Data for Computation, Analysis, and Reference

Organizing Data for Effective Analysis

Using Data Tables and Excel Scenarios for What-If Analysis

Enhancing Decision Making with Solver

Troubleshooting Workbooks and Automating Excel Applications

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Exam 6: Evaluating the Financial Impact of Loans and Investments

Depreciation needs to be _____ the cash flow in each year to calculate taxes for that year.

In the function =IPMT(B$3/B$5,A11,B$4*B$5,B$2,B$6,0), the entry "B$6" represents the ____.

MATCHING Identify the letter of the choice that best matches the word or phrase. -Interest that is paid solely on the amount of the original principal value

If you are calculating a positive future value (money being withdrawn from a bank, which is a positive cash flow), your formula requires a negative ____.

The depreciation method that computes depreciation at an accelerated rate with depreciation being highest in the first period and decreasing in successive periods is ____.

Interest that is paid solely on the amount of the original principal value is called ____________________ interest.

NPV requires that value1, value2, value3, and so on must be equally spaced in time and occur at ____.

What is the correct syntax of the PMT function? Briefly describe each of the arguments associated with this function.

Corporate taxes allow companies to allocate portions of the capital investment as an expense, thereby reducing the amount of taxes owed.

A house that costs $200,000 and requires a 10% down payment would have an original loan value (pv) of ____.

The values argument in the IRR function is a list of positive and negative cash flows. _________________________

The RATE function syntax is as follows: =RATE(nper,pmt,pv,fv,____________________,[guess]).

MATCHING Identify the letter of the choice that best matches the word or phrase. -The value of the loan or investment

MATCHING Identify the letter of the choice that best matches the word or phrase. -Cash amounts paid or received

After the ____ and depreciation have been deducted, taxes can be calculated.

____ is preferred by most financial theorists because it uses the expected cash flows and applies a minimum rate of return to discount these cash flows into current (present) value dollars.

Payments that are inflows should be ____________________, and payments that are outflows should be negative.

Interest that is paid solely on the amount of the original principal value is called ____ interest.

Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below. -Applying the IRR function to the worksheet in cell B39, Natalie writes the formula ____.

The PMT function finds the value of the payment per period, assuming that there are constant payments and a constant interest rate for the duration of the loan.

Applying Fundamental Excel Skills and Tools in Problem Solving

Solving Problems with Statistical Analysis Tools

Determining Effective Data Display with Charts

Applying Logic in Decision Making

Retrieving Data for Computation, Analysis, and Reference

Organizing Data for Effective Analysis

Using Data Tables and Excel Scenarios for What-If Analysis

Enhancing Decision Making with Solver

Troubleshooting Workbooks and Automating Excel Applications

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