CFI FMVA EXAM QUESTIONS AND ANSWERS 100% SOLVED (Newest
2025)
You are considering an investment into Company XYZ and need to determine the company's value and the appropriate
investment amount. You have been provided with historical financial statements for the past three years in order to build
a forecast model. Key assumptions to use include:
1. Future sales revenue is assumed to increase at 2.5% annually.
2. Gross margin for 2021E is assumed to be equal to the average gross margin % for 2019 and 2020, but will decrease
by 2.5% (i.e. 250 bps) each year thereafter.
3. SG&A expense is assumed to be a percentage of revenue for the forecast period. That percentage is equal to the
2018-2020 average. SG&A Ratio = SG&A / Total Revenue
4. Depreciation expense is assumed to be a percentage of revenue for the forecast period. That percentage is equal to
the 2018-2020 average
5. The tax rate for the forecast period is assumed to be equal to the effective tax rate for 2018
6. Capital expenditures for any given year in the forecast period is assumed to be 3x the prior year's depreciation
expense. For example, 2021 capital expenditures is equal to 3x 2020 depreciation expense.
,7. No new debt or equity is assumed to be issued
8. For an individual: ETR = Total Tax ÷ Taxable Income. For a corporation: ETR = Total Tax ÷ Earnings Before
Taxes.
1
1. What is Gross Profit in 2028E using the assumptions listed above and on the Control Panel?
Review Later
$17,545
$27,780
$30,704
$40,938
2
2. What is EBITDA in 2022E using the assumptions listed above and on the Control Panel?
,Review Later
$14,625
$20,172
$18,911
$17,404
3
3. What is Cash Generated From Operating Activities in 2025E using the assumptions listed above and on the
Control Panel? Review Later
$12,074
$12,379
, $12,640
$13,523
4
4. What is the PP&E balance in 2030E using the assumptions listed above and on the Control Panel?
Review Later
$122,220
$158,604
$136,122
$148,922
5
5. What is the cash ratio in 2025E using the assumptions listed above and on the Control Panel? Review Later
2025)
You are considering an investment into Company XYZ and need to determine the company's value and the appropriate
investment amount. You have been provided with historical financial statements for the past three years in order to build
a forecast model. Key assumptions to use include:
1. Future sales revenue is assumed to increase at 2.5% annually.
2. Gross margin for 2021E is assumed to be equal to the average gross margin % for 2019 and 2020, but will decrease
by 2.5% (i.e. 250 bps) each year thereafter.
3. SG&A expense is assumed to be a percentage of revenue for the forecast period. That percentage is equal to the
2018-2020 average. SG&A Ratio = SG&A / Total Revenue
4. Depreciation expense is assumed to be a percentage of revenue for the forecast period. That percentage is equal to
the 2018-2020 average
5. The tax rate for the forecast period is assumed to be equal to the effective tax rate for 2018
6. Capital expenditures for any given year in the forecast period is assumed to be 3x the prior year's depreciation
expense. For example, 2021 capital expenditures is equal to 3x 2020 depreciation expense.
,7. No new debt or equity is assumed to be issued
8. For an individual: ETR = Total Tax ÷ Taxable Income. For a corporation: ETR = Total Tax ÷ Earnings Before
Taxes.
1
1. What is Gross Profit in 2028E using the assumptions listed above and on the Control Panel?
Review Later
$17,545
$27,780
$30,704
$40,938
2
2. What is EBITDA in 2022E using the assumptions listed above and on the Control Panel?
,Review Later
$14,625
$20,172
$18,911
$17,404
3
3. What is Cash Generated From Operating Activities in 2025E using the assumptions listed above and on the
Control Panel? Review Later
$12,074
$12,379
, $12,640
$13,523
4
4. What is the PP&E balance in 2030E using the assumptions listed above and on the Control Panel?
Review Later
$122,220
$158,604
$136,122
$148,922
5
5. What is the cash ratio in 2025E using the assumptions listed above and on the Control Panel? Review Later
