## Succeeding in Business

Computing

## Quiz 6 :

Evaluating the Financial Impact of Loans and Investments

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Q106 Q106 Q106

Case 6-1
Phil has put together the worksheet above with a 5-year cash flow estimate for his shoe company. He needs to explain the chart to his investors. Please answer the questions below using this figure as a reference.
-Phil enters the tax rate of 35% in the workbook as a range named Taxrate without first entering the value itself in the workbook. In Excel, you can give a value a range name without actually entering the value in a specific cell. To do so, you use the ____ dialog box.

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Multiple Choice

Q107 Q107 Q107

Case 6-1
Phil has put together the worksheet above with a 5-year cash flow estimate for his shoe company. He needs to explain the chart to his investors. Please answer the questions below using this figure as a reference.
-Phil also assumes that the actual taxes owed will be rounded to the nearest dollar. Using this information, he enters the formula ____ in cell C18 to calculate the taxes. This is the area indicated by #1 in the figure above.

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Multiple Choice

Q108 Q108 Q108

Case 6-1
Phil has put together the worksheet above with a 5-year cash flow estimate for his shoe company. He needs to explain the chart to his investors. Please answer the questions below using this figure as a reference.
-Phil also calculates the projected income after taxes in cell C19 using the formula ____.

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Multiple Choice

Q109 Q109 Q109

Case 6-1
Phil has put together the worksheet above with a 5-year cash flow estimate for his shoe company. He needs to explain the chart to his investors. Please answer the questions below using this figure as a reference.
-Phil now must add back the depreciation because this is not actually a cash flow. Cell C15 contains the depreciable amount represented as a negative value. In this case, Phil enters the formula ____ in cell C21 and copies it across the row.

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Multiple Choice

Q110 Q110 Q110

Case 6-1
Phil has put together the worksheet above with a 5-year cash flow estimate for his shoe company. He needs to explain the chart to his investors. Please answer the questions below using this figure as a reference.
-To determine the projected cash flow, Phil must now total the following: taxable income, depreciation added back to the cash flow, and principal payments deducted from the cash flow (already a negative value). Phil enters the following formula in cell C24 and copies it across the row: ____.

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Multiple Choice

Q111 Q111 Q111

Case 6-2
Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below.
-In college, Natalie had to calculate IRR manually so that she would have a good understanding of the way it worked. To do that, she needed to guess an IRR value and substitute it as the ____ in the NPV formula.

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Multiple Choice

Q112 Q112 Q112

Case 6-2
Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below.
-Natalie knows the syntax of the IRR function is as follows: IRR(values,[guess]). The values argument is a list of positive and negative cash flows. For this function to work, ____.

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Multiple Choice

Q113 Q113 Q113

Case 6-2
Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below.
-Natalie's company has been going through a rocky time. Her boss asks her what would be an acceptable cash flow interval for calculating IRR. What should be her answer?

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Multiple Choice

Q139 Q139 Q139

MATCHING
Identify the letter of the choice that best matches the word or phrase.
a.simple interest
b.principal
c.interest
d.compound interest
e.balloon payment
f.cash flow
-Adding interest earned each period to the principal for purposes of computing interest for the next period

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Short Answer

Q149 Q149 Q149

Correctly set up an NPER function, assuming you are solving for how many years it will take to pay off a loan. You do not have to do the calculations-just set up the formula based on the facts below:
• NPER(rate,pmt,pv,fv,type)
• The rate per year is 3.5% compounded quarterly.
• The payment (pmt) is -$25,000 per quarter.
• The present value (pv) is $400,000 because the bank has offered to fund all of the capital required for the project.
• The future value (fv) is assumed to be $0 because no mention is made of any residual amounts owed at the end of the loan.
• The type argument is assumed to be the default 0.

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