Exam 6: Evaluating the Financial Impact of Loans and Investments

____ is preferred by most financial theorists because it uses the expected cash flows and applies a minimum rate of return to discount these cash flows into current (present) value dollars.

This function rounds the taxes owed: =-____________________(Taxrate*C16,0).

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. -Applying the IRR function to the worksheet in cell B39, Natalie writes the formula ____.

Financial institutions advertise their loan interest rates in what is referred to as an annual loan plan, or ALP.

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?

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.

The syntax of the FV function is =FV(rate,nper,pmt,[pv],[type]).

Identify the letter of the choice that best matches the arguments in the CUMIPMT function. -Ending period

The syntax of the IRR function is as follows: ____.

Named ranges can be named and then specified as either a workbook scope or to a specific ____.

A bank account would have an fv equal to the ____ plus any accrued interest, plus or minus any payments into or out of the account.

The NPV function in Excel takes the cash flow from year 0, which is referred to as value0, and discounts the value by one year. _________________________

=NPER(rate,pmt,pv,fv,type) solves for the interest rate per period.

Which formula from the list below can be copied across a row to create a row of cumulative totals?

The NPV function in Excel takes the cash flow from year 0, which is referred to as value 1, and discounts the value by ____________________.

Identify the letter of the choice that best matches the arguments in the CUMIPMT function. -Initial loan amount (pv)

The ____ function calculates the value of the interest payment for a specified period.

MATCHING Identify the letter of the choice that best matches the word or phrase. -A user fee you are paying to "use" the bank's money

MATCHING Identify the letter of the choice that best matches the word or phrase. -Cash amounts paid or received

Principal payments represent negative cash flows.