M&A Modeling Exam Answers from Wall Street Prep / Wall Street Prep Premium Exam ..REVIEW : M& A
MODELING RETAKE EXAM
M&A Modeling Exam Answers from Wall
Street Prep / Wall Street Prep Premium
Exam ..REVIEW : M& A MODELING RETAKE
EXAM
Question 1
What is generally not considered to be a pre-tax non-recurring (unusual or
infrequent) item?
Correct Answer
Extraordinary gains/losses
Question 2
what is false about depreciation and amortization
Correct Answer
D&A may be classified within interest expense
Question 3
Company X's current assets increased by $40 million from 2007-2008 while the
companies current liabilities increased by $25 million over the same period. the cash
impact of the change in working capital was
Correct Answer
a decrease of 15 million
Question 4
the final component of an earnings projection model is calculating interest expense.
the calculation may create a circular reference because
Correct Answer
interest expense affects net income, which affects FCF, which affects the amount of
debt a company pays down, which, in turn affects the interest expense, hence the
circular reference
Page 1 of 15
, M&A Modeling Exam Answers from Wall Street Prep / Wall Street Prep Premium Exam ..REVIEW : M& A
MODELING RETAKE EXAM
Question 5
a 10-q financial filing has all of the following characteristics except
Correct Answer
issued four times a year.
Question 6
Depreciation Expense found in the SG&A line of the income statement for a
manufacturing firm would most likely be attributable to which of the following
Correct Answer
computers used by the accounting department
Question 7
If a company has projected revenues of $10 billion, a gross profit margin of 65%, and
projected SG&A expenses of $2billion, what is the company's operating (EBIT)
margin?
Correct Answer
45%
Question 8
A company has the following information, 1. 2014 revenues of $5 billion,2013
Accounts receivable of $400 million, 2014 accounts receivable of $600 million, what
are the days sales outstanding
Correct Answer
36.5
Page 2 of 15
MODELING RETAKE EXAM
M&A Modeling Exam Answers from Wall
Street Prep / Wall Street Prep Premium
Exam ..REVIEW : M& A MODELING RETAKE
EXAM
Question 1
What is generally not considered to be a pre-tax non-recurring (unusual or
infrequent) item?
Correct Answer
Extraordinary gains/losses
Question 2
what is false about depreciation and amortization
Correct Answer
D&A may be classified within interest expense
Question 3
Company X's current assets increased by $40 million from 2007-2008 while the
companies current liabilities increased by $25 million over the same period. the cash
impact of the change in working capital was
Correct Answer
a decrease of 15 million
Question 4
the final component of an earnings projection model is calculating interest expense.
the calculation may create a circular reference because
Correct Answer
interest expense affects net income, which affects FCF, which affects the amount of
debt a company pays down, which, in turn affects the interest expense, hence the
circular reference
Page 1 of 15
, M&A Modeling Exam Answers from Wall Street Prep / Wall Street Prep Premium Exam ..REVIEW : M& A
MODELING RETAKE EXAM
Question 5
a 10-q financial filing has all of the following characteristics except
Correct Answer
issued four times a year.
Question 6
Depreciation Expense found in the SG&A line of the income statement for a
manufacturing firm would most likely be attributable to which of the following
Correct Answer
computers used by the accounting department
Question 7
If a company has projected revenues of $10 billion, a gross profit margin of 65%, and
projected SG&A expenses of $2billion, what is the company's operating (EBIT)
margin?
Correct Answer
45%
Question 8
A company has the following information, 1. 2014 revenues of $5 billion,2013
Accounts receivable of $400 million, 2014 accounts receivable of $600 million, what
are the days sales outstanding
Correct Answer
36.5
Page 2 of 15
