BUS 1350 EXAM 2 PRACTICE SET 2025

Cash flow - -direction in which money flows either to or from the user Negative cash flow - -money that's flowing from the user Positive cash flow - -money that's flowing to user Rate - -interest rate per period Nper - -total number of payment periods Pv - -present value of loan/investment Fv - -future value of loan/investment at a future date Type - -specifies whether payments are made at the end of each period or at beginning Pmt - -used to calculate the payment per period based on a specific interest rate and term Rate function - -used to calculate the interest rate per period for an investment or loan, given that you know the present value of the loan, payment amount and number of payment periods Nper - -used to calculate the number of payment periods for an investment or loan if you know the loan amount, interest rate and payment amount Ppmt - -used to calculate the principal portion of a payment Ipmt - -used to calculate the interest portion of a payment Cumimpt - -used to calculate the cumulative amount of interest paid over a specific number of periods Cumprinc - -used to calculate the cumulative amount of principal paid over a specific number of periods Bonds - -_________ typically have a fixed interest rate Face value - -how much the bondholder will receive at maturity Maturity - -length of time before the par value is paid to the bondholder BUS 1350 BUS 1350 BUS 1350 Coupon - -interest rate the bond pays Yield - -amount of annual interest expressed as a percentage of par value and determines how much investors will receive on their investment Pv - -used to calculate the present and current value of a series of future payments on an investment assuming all future payments are equal Fv - -used to calculate the value of an investment with a fixed interest rate and term, as well as present or current value of a series of future payments on an investment Npv - -calculate the value of an investment by analyzing a series of future incoming and outgoing cash flows that are expected to occur over the life of the investment Xnpv - -used to calculate the value of an investment or business by analyzing an irregular time series of incoming and outgoing cash flows Irr - -used to calculate discount rate at which you would break even on an investment; at point at which the npv of an investment = 0 Xirr - -used to calculate discount rate at which you would break even on an investment but the cash flows are irregular or not periodic Tangible assets - -non-cash assets that are long-lasting material assets not intended for sale but for use by the company Straight-line depreciation - -simplest and most commonly used method; assumes that value of asset loses the same amount of value each year of its life Declining balance depreciation - -assumes that the value of an asset depreciates more in the first year than in the second year and so forth Double declining balance depreciation - -requires that the straight-line depreciation method be used first to calculate the total percentage of the asset that's depreciated in the first year and doubles it Sln - -asset loses its value in equal amounts each year until it reaches the salvage value at the end of its useful life Db - -asset depreciates by a constant percentage each year Ddb - -calculates the depreciation of an asset, using the double declining balance method or another specified depreciation rate Interpolation - -process of estimating the values between a given start and end point BUS 1350 BUS 1350 Extrapolation - -process for estimating the values when you have a beginning but not an end Cogs percent - -cost of goods as a percent of total sales Payroll percent - -total payroll costs as a percent of total sales Prime cost percent - -cost of goods and labor as a percent of sales Controllable profit percent - -controllable profit as a percent of total sales Occupancy percent - -total occupancy costs as a percent of total sales Pretax profit percent - -pretax profit as a percent of total sales Total sales - -measures the income from the sale of food and beverage menu items at the franchise Cost of goods sold (cogs) - -measures the raw material cost for food and beverage; increasing as sales volume increases Payroll costs - -measures the cost of salaries, wages, employee benefits, and payroll taxes Prime costs - -measures the sum of cogs and payroll costs and is considered the largest area of expenditure for the franchise with typically about 2/3rds of expenses coming from prime costs Operating costs - -measure the expenses required for franchise operation not directly related to cogs and payroll costs Controllable profit - -profit considering only those expense factors under the franchise's direct control (prime costs and operating costs) Occupancy costs - -expenses directly related to occupancy of the franchise space, including rent, property taxes, and insurance Interest - -measures the amount paid in interest of loans to fund the purchase and operation of the franchise; doesn't include payments made to pay off the principal of any loan Depreciation - -measures the amount by which the franchise's material assets decline in value Pretax profit - -restaurant profit, calculated by subtracting prime costs, operating expenses, occupancy costs, interest and depreciation from total sales BUS 1350 BUS 1350 Raw data - -considered to be elements or raw facts that may or may not have meaning or relevance Financial functions - -deal with cash flow; excel functions used for analyzing loans, investments and financial metrics Time - -interest rate and payment period must use same ________ unit PV argument - -the _______________________ for a loan is positive because it represents the amount of money being borrowed Negative - -PMT function returns a ___________ value bc it represents money being spent to repay the loan Investments - -PV argument is negative when used with _______________ bc it represents the initial amount of money being invested