FINANCIAL MODELING ACTUAL EXAM 1 |50 COMPLETE
AND GRADED QUESTIONS AND ANSWERS 2026 LATEST
UPDATED | 100% GRADED CORRECT | 100% GUARANTEED
TO PASS | GET A+
The 3 equivalent ways of calculating the present value of a single cash flow are: - (answer)1. PV
formula
2. PV function
3. PV timeline
The effect of future value of a single cash flow when you increase the PV - (answer)an increase
in the FV
The effect of future value when you increase the discount rate - (answer)an increase in FV
The effect of future value when you increase the number of periods - (answer)an increase in the
FV
Fully explain the formula used for calculating the FV of each cash flow - (answer)Each cash
flow is compounded at the Discount Rate for the remaining periods
, What is the name of the term that the Present Value is divided by to get the Payment. Why does
this formula give the Payment amount? - (answer)Present Value Interest Factor of Annuity. APV
= PMT X PVIFA. So, dividing by the Present Value Interest Factor undo's the product, and gives
you the PMT.
Show the formula for calculating the Annuity Present Value using the Annuity Future Value,
Discount Rate, and # of Periods in Excel Notation - (answer)APV = AFV/(1+r)^t
State the effect of increasing the payment amount on the APV and AFV - (answer)APV =
increase in FV
AFV = increase in FV
Can the constant discount rate method be used to calculate NPV in the general case where the
discount rate changes over time? Why/Why not? - (answer)No, because the NPV function &
constant discount formula only allow for one constant discount rate.
Fully explain the NPV function used to calculate the NPV in cell b21 - (answer)The NPV
function in Excel assumes that Year 0 cash flow occurs at the end of the year instead of the
beginning, so you add it to the NPV of the remaining years using the NPV function. The NPV
function takes the cash flows from each year, discounts it by the nominal discount rate (which is
AND GRADED QUESTIONS AND ANSWERS 2026 LATEST
UPDATED | 100% GRADED CORRECT | 100% GUARANTEED
TO PASS | GET A+
The 3 equivalent ways of calculating the present value of a single cash flow are: - (answer)1. PV
formula
2. PV function
3. PV timeline
The effect of future value of a single cash flow when you increase the PV - (answer)an increase
in the FV
The effect of future value when you increase the discount rate - (answer)an increase in FV
The effect of future value when you increase the number of periods - (answer)an increase in the
FV
Fully explain the formula used for calculating the FV of each cash flow - (answer)Each cash
flow is compounded at the Discount Rate for the remaining periods
, What is the name of the term that the Present Value is divided by to get the Payment. Why does
this formula give the Payment amount? - (answer)Present Value Interest Factor of Annuity. APV
= PMT X PVIFA. So, dividing by the Present Value Interest Factor undo's the product, and gives
you the PMT.
Show the formula for calculating the Annuity Present Value using the Annuity Future Value,
Discount Rate, and # of Periods in Excel Notation - (answer)APV = AFV/(1+r)^t
State the effect of increasing the payment amount on the APV and AFV - (answer)APV =
increase in FV
AFV = increase in FV
Can the constant discount rate method be used to calculate NPV in the general case where the
discount rate changes over time? Why/Why not? - (answer)No, because the NPV function &
constant discount formula only allow for one constant discount rate.
Fully explain the NPV function used to calculate the NPV in cell b21 - (answer)The NPV
function in Excel assumes that Year 0 cash flow occurs at the end of the year instead of the
beginning, so you add it to the NPV of the remaining years using the NPV function. The NPV
function takes the cash flows from each year, discounts it by the nominal discount rate (which is
