MBA 741 Final Exam ACTUAL UPDATED QUESTIONS AND CORRECT ANSWERS
3 stages of deriving insights: -reviewing patterns
-testing hypotheses
-reporting findings
4 Financial Metrics: 1. profit
2. NPV
3. Payback
4. IRR
The essential customer value metric: -customer lifetime value (CLTV)
-NPV of a customer
Reviewing patterns (data science) - towards insight helps validate patterns in the data if there is a real problem and if there are
unusual patterns in key variables
Testing hypotheses (data science) - towards insight -prove or disprove hypotheses
-look at each one at a time and examine the relevant data needed to prove or
disprove each one
-determine relationship between business questions and hypotheses variable
Reporting findings (data science) - towards insight -determine $ impact of the identified issues or proven hypotheses
-present the findings in terms of quantified impact to guide prioritization of the
hypotheses for analyses
Profit profit = revenue - cost
Profit over sales -prioritizing sales volume and market share may cut into profits
-investing into branding, improving customer satisfaction and customer loyalty
may be a more profitable strategy
Considerations for financial return keep track of how profitable we are
Net present value (NPV) -the sum of the present values of expected future cash flows from an investment,
minus the cost of that investment
PV-Cost = NPV
Invest if NPV is: greater than zero
Do not invest if NPV is: less than zero
, Internal rate of return (IRR) the interest rate that sets the net present value of the cash flows equal to zero and
solves for R
Payback -time period needed for the revenue to become greater than the costs
(breakeven)
-usually not discounted, but it is used as a rule of thumb for decision making
3 stages of deriving insights: -reviewing patterns
-testing hypotheses
-reporting findings
4 Financial Metrics: 1. profit
2. NPV
3. Payback
4. IRR
The essential customer value metric: -customer lifetime value (CLTV)
-NPV of a customer
Reviewing patterns (data science) - towards insight helps validate patterns in the data if there is a real problem and if there are
unusual patterns in key variables
Testing hypotheses (data science) - towards insight -prove or disprove hypotheses
-look at each one at a time and examine the relevant data needed to prove or
disprove each one
-determine relationship between business questions and hypotheses variable
Reporting findings (data science) - towards insight -determine $ impact of the identified issues or proven hypotheses
-present the findings in terms of quantified impact to guide prioritization of the
hypotheses for analyses
Profit profit = revenue - cost
Profit over sales -prioritizing sales volume and market share may cut into profits
-investing into branding, improving customer satisfaction and customer loyalty
may be a more profitable strategy
Considerations for financial return keep track of how profitable we are
Net present value (NPV) -the sum of the present values of expected future cash flows from an investment,
minus the cost of that investment
PV-Cost = NPV
Invest if NPV is: greater than zero
Do not invest if NPV is: less than zero
, Internal rate of return (IRR) the interest rate that sets the net present value of the cash flows equal to zero and
solves for R
Payback -time period needed for the revenue to become greater than the costs
(breakeven)
-usually not discounted, but it is used as a rule of thumb for decision making
