1. Using only the information provided in the following worksheet, what is the correct formula to calculate the total cash flows from financing?
a. =(B2-C2)-(B4+(B3-C3))
b. =(B2-C2)+(B4-(B3-C3))
c. =(B3-C3)-(B4-(B2-C2))
d. =(B2-C2)-(B4-(B3-C3))
e. =(B2+C2)-(B4+(B3+C3))

2. What is the correct formula to calculate the percentage change in prepaid expenses from 2010 to 2011 using
horizontal analysis with percentages as solution?
A

B

C

D

Account

2011

2010

$ 10,000

$ 26,000

2 Accounts Receivable

49,600

35,460

3 Inventory

25,000

25,450

4 Prepaid Expenses

22,400

32,400

5 Notes Payable

52,000

52,000

6 Common Stock

34,000

45,000

7 Retained Earnings

21,000

22,310

1 Cash

a. (C4/D4)/2
b. C4/D4
c. C4*D4/2
d. (C4-D4)/D4
e. (D4-D5)/D5

(Format as a percentage)
(Format as a percentage)
(Format as a percentage)
(Format as a percentage)
(Format as a percentage)

3. Assume that this data represents all of the assets, liabilities and capital of a company. What is the formula to
calculate the number in vertical analysis for Inventory for 2011?
A

B

C

D

Account

2011

2010

1 Cash

$ 10,000

$ 26,000

2 Accounts Receivable

49,600

35,460

3 Inventory

15,000

25,450

4 Prepaid Expenses

32,400

32,400

5 Notes Payable

52,000

52,000

6 Common Stock

34,000

45,000

7 Retained Earnings

21,000

22,310

 
a. C3/(C1+C2+C3+C4) (Format as a percentage)
b. C3/SUM(C1..C4)
(Format as a percentage)
c. C3/D3
(Format as a percentage)
d. SUM(C1..C3)/D3
(Format as a percentage)
e. Both a and b
(Format as a percentage)
4. Which is the correct formula for cell B6 that will allow you to determine how many years will it take to quadruple your savings at 11 percent compounded quarterly?
a. =NPER(B4/B5,0,-B2,4*B3,0)/4
b. =NPER(B4/B5,0,-B2,B2,0)
c. =NPER(B4/B5,0,-B2,B2,0)/4
d. =NPER(B4/B5,0,-B2,4*B2,0)
e. =NPER(B4/B5,0,-B2,4*B2,0)/4
Remember that the basic syntax of the NPER function is: NPER(rate,pmt,pv,fv,type)

5. What should be the outcome of cell B? Remember that the basic syntax of the IRR function is:
IRR(values,guess)
a. “Accept”
b. “Reject”
c. “Indifferent”

6. Which is the correct formula in cell B4 to calculate the future value of $1,000 invested at 15% annual rate after 2 years using continuous compounding?
a. =B3*EXP(B1*B2)
b. =B2*EXP(B1*B3)
c. =B1*EXP(B2*B3)
d. =B1/EXP(B2*B3)
e. =B1*EXP(B2+B3)
7. Which should be the right formula for cell B5?
a. =(B2*C2)-(B3*C3)+(1-B2+B3)*C4
b. =(B2*C2)-(B3*C3)-(1-B2-B3)*C4
c. =(B2/C2)+(B3/C3)+(1-B2-B3)/C4
d. =(B2*C2)+(B3*C3)+(1-B2-B3)*C4
e. =(B2*C2)+(B3*C3)+(1+B2+B3)*C4

8. What should be the formula on cell B5?
a. =(B3*B4)/(B2+B3)
b. =B1*B4/B2+B3
c. =(B1+B4)/(B2*B3)
d. =(B1*B4)/(B2+B3)
e. =(B3*B4)/(B2-B3)
 
9. What should be the formula on cell B5?
A
B
Fixed Costs
$
1,500,000
Estimated Sales in Units
100,000
Price per Unit
$50
Variable Costs per Unit
$20
Operating Breakeven Point
in Revenue Dollars
?
a. =B1/(B3-B4)/B3
b. =B1/B3-B4*B3
c. =(B1/B3)-B4*B3
d. =B1/((B3-B4)/B3)
e. =B1/(B3+B4)*B3

10. Which of the following would be the correct formula for cell B7?
a. =-B2/B3
b. =FAME_Payback(B2:B6)
c. =FAME_Payback(B2:B6,0)
d. =2-(B2+B3+B4)/B5
e. A and D