Financial Modeling & Analysis Exam I
Three Equivalent methods of calculating the prevailing cost of a unmarried coins glide -
ANS1. The Present Value Formula
2. Present Value PV Excel Function
three. A Present Value Timeline wherein every column corresponds to a duration
What is the effect on the FV of a single cash flow whilst you boom:
a.Present Value
b.Discount Rate
c. Number of Periods - ANSAn increase in the FV
Explain the Future of Cash Flow Formula - ANSEach cash flow is compounded at a
Discounted Rate for the last periods
Show the Annuity Future Value components - ANSAFV=APV*(1+r)^t
Show the Annuity Present Value method - ANSAPV=AFV/(1+r)^t
Explain why dividing the APV with the aid of the PVIFA gives the Payment amount of the
Annuity - ANSAPV=PMT*PVIFA
What happens to the PV of a unmarried coins drift whilst you growth Discount Rate and the
Number of Periods - ANSDecreases
List the two additives of the annuity fee of an amortized mortgage - ANSa.)Interest
b.)Principal
State the impact of growing the price amount at the APV and AFV - ANSAn Increase inside
the Future Value
In which yr is the foremost factor of the payment quantity of a 30-year amortized loan at its
highest stage? Why? - ANSYear 30 due to the fact the interest componet is at its lowes
State the intuitive interpretation of the following aspect of the Return on Equity within the
DuPont System of Ratio Analysis: EBIT/Sales - ANSProfit Margin
State whether a firm's hobby-burden ratio could be better or lower if it will pay extra hobby
relative to EBIT. Explain. - ANSLower because its pretax profit might be decrease relative to
EBIT.
State what Excel's YEARFRAC feature calculates - ANSThe fraction of a year between two
calendar dates
Three Equivalent methods of calculating the prevailing cost of a unmarried coins glide -
ANS1. The Present Value Formula
2. Present Value PV Excel Function
three. A Present Value Timeline wherein every column corresponds to a duration
What is the effect on the FV of a single cash flow whilst you boom:
a.Present Value
b.Discount Rate
c. Number of Periods - ANSAn increase in the FV
Explain the Future of Cash Flow Formula - ANSEach cash flow is compounded at a
Discounted Rate for the last periods
Show the Annuity Future Value components - ANSAFV=APV*(1+r)^t
Show the Annuity Present Value method - ANSAPV=AFV/(1+r)^t
Explain why dividing the APV with the aid of the PVIFA gives the Payment amount of the
Annuity - ANSAPV=PMT*PVIFA
What happens to the PV of a unmarried coins drift whilst you growth Discount Rate and the
Number of Periods - ANSDecreases
List the two additives of the annuity fee of an amortized mortgage - ANSa.)Interest
b.)Principal
State the impact of growing the price amount at the APV and AFV - ANSAn Increase inside
the Future Value
In which yr is the foremost factor of the payment quantity of a 30-year amortized loan at its
highest stage? Why? - ANSYear 30 due to the fact the interest componet is at its lowes
State the intuitive interpretation of the following aspect of the Return on Equity within the
DuPont System of Ratio Analysis: EBIT/Sales - ANSProfit Margin
State whether a firm's hobby-burden ratio could be better or lower if it will pay extra hobby
relative to EBIT. Explain. - ANSLower because its pretax profit might be decrease relative to
EBIT.
State what Excel's YEARFRAC feature calculates - ANSThe fraction of a year between two
calendar dates
