Deck 9: Exploring Financial Tools and Functions

Question 1

The fv argument is required in the PMT function.

Answer 1

  False

Question 2

The major advantage of the payback period is that it takes into account the time value of money.

Answer 2

  False

Question 3

When using the PMT function to calculate monthly loan payments,the interest rate and the number of payments should be based on the interest rate per year and the total months to pay off the loan._________________________

Answer 3

  False
month

Question 4

If you don't include a pv value,Excel assumes a future value of 1._________________________

Question 5

When you change a cell's value,a Watch Window allows you to view the impact of the change on widely scattered dependent cells.

Question 6

The list of values in the XNPV function must include at least one positive cash flow and one negative cash flow.

Question 7

If you plan to invest money for 18 months,the value of the nper argument in the PMT function is 18._________________________

Question 8

The _______ function calculates the amount paid into an investment or loan during each payment period.

A) NPER
B) RATE 
C) PMT
D) INT

Question 9

At higher rates of return,the net present value of the investment goes up._________________________

Question 10

The FV function calculates the full value of an investment or loan._________________________

Question 11

The tracer arrow provides a visual clue to the source of the error.

Question 12

If the NPER function returns #NUM!,the loan cannot be repaid in any length of time.

Question 13

In an amortization schedule,use relative references to refer to the original loan conditions and use absolute references to refer to information about specific payment periods.

Question 14

You can extrapolate a series of values from the Series dialog box._________________________

Question 15

To calculate a declining balance depreciation,use the DVB function.

Question 16

A(n)dependent cell is one whose value depends on the values of other cells in the workbook._________________________

Question 17

The function DDB is used to calculate a(n)declining balance depreciation._________________________

Question 18

The possibility that the entire transaction will fail,resulting in a loss of the initial investment is called the chance._________________________

Question 19

Cash flow is concerned with the direction of money as it moves in and out of a company.

Question 20

A(n)negative cash flow occurs when cash is going away from the investor._________________________

Question 21

To calculate the number of montly payments required to pay off a loan or meet an investment goal,use the _______ function.

A) PMT
B) FV 
C) PPMT
D) NPER

Question 22

In the function =CUMIPMT(rate,nper,pv,start,end,type),it is _______ that defines whether the payments are made at the beginning or end of each period.

A) rate
B) nper 
C) end
D) type

Question 23

Most Excel financial functions require a particular _______ to the cash flow to return the correct value.

A) index
B) valence 
C) orientation
D) direction

Question 24

To calculate a series of values from a starting point without a defined ending point,you have to _______ the values.

A) interpolate
B) extrapolate 
C) assess
D) plot

Question 25

The _______ function takes only these arguments: cost,salvage,and life.

A) SLN
B) SYD 
C) DB
D) VDB

Question 26

To calculate the annual rate,you must _______ the value returned by the RATE function by the number of payments per year.

A) add
B) subtract 
C) multiply
D) divide

Question 27

When you extrapolate a series,the _______ value represents the amount that each value is increased or multiplied as the series is extended.

A) Increase
B) Step 
C) Extension
D) Advance

Question 28

The _______ function calculates the interest rate charged or received during each payment period.

A) RATE
B) PV 
C) NPER
D) FV

Question 29

The _______ function calculates the present value of an investment or loan.

A) PRES
B) PV 
C) NPER
D) FV

Question 30

Which of the following shows the syntax of the NPER function? 

A) =NPER(pmt, pv, [fv=0], [type=0]) 
B) =NPER(rate, pmt, [fv=0], [type=0]) 
C) =NPER(rate, pmt, pv [, fv=0] [, type=0]) 
D) =NPER(pmt, rate, pv, [fv=0], [type=0])

Question 31

Financial functions format calculated values as currency,with _______.

A) positive cash flow appearing in red font 
B) positive cash flow enclosed in parentheses 
C) negative cash flow appearing in green font 
D) negative cash flow appearing in red font

Question 32

The _______ function returns the amount of a particular payment that is used to pay the interest on the loan.

A) PMT
B) IPMT 
C) INPMT
D) NPMT

Question 33

The _______ function calculates the number of payment periods in an investment or loan.

A) RATE
B) PV 
C) NPER
D) FV

Question 34

To calculate the number of quarterly payments required to pay off a loan,use the _______ function.

A) PMT
B) PV 
C) FV
D) NPER

Question 35

The process of allocating the original cost of an investment over the years of use is known as _______.

A) interest
B) balance 
C) depreciation
D) amortization

Question 36

When you borrow money,the money you receive represents a _______ cash flow.

A) positive
B) negative 
C) fixed
D) neutral

Question 37

To project a trend that decreases rather than increases,use a step value of less than _______ for a linear trend.

A) -1
B) 0 
C) 1
D) 2

Question 38

In a(n)_______ trend,the values change by a constant amount.

A) linear
B) growth 
C) periodic
D) orthogonal

Question 39

To _______ a series,the cells between the first and last cells in the series must be blank.

A) extrapolate
B) concatenate 
C) integrate
D) interpolate

Question 40

With the PMT function,the type argument is _______ when the payments are made at the end of each period.

A) 0
B) 1 
C) a
D) -1

Question 41

A(n)_______ worksheet projects the company's expected assets,liabilities,and equity.

A) Asset Report
B) Income Statement 
C) Balance Sheet
D) Transactions

Question 42

The NPV function is used in calculating the net present value of a transaction,which is the _______ value of all the cash inflows and outflows in the investment adjusted by the time value of money.

A) current
B) projected 
C) future
D) total

Question 43

If in Charles's sheet,cell A4 is a precedent cell for cell B7,what kind of a cell is B7? 

A) contingent cell
B) dependent cell 
C) antecedent cell
D) indicated cell

Question 44

Use the XNPV and XIRR functions for cash flows that appear _______.

A) with a regular pattern
B) at unevenly spaced intervals 
C) at evenly spaced intervals
D) to be cyclical

Question 45

If Charles sees red tracer arrows that means there is an error in the value being received from the precedent cell or passed to the _______ cell.

A) child
B) precedent 
C) dependent
D) contingent

Question 46

The DB function used to calculate the declining balance depreciation has the following syntax: _______.

A) =DB(salvage, life, period [month]) 
B) =DB(cost, salvage, period [month]) 
C) =DB(salvage, cost, life, period [month]) 
D) =DB(cost, salvage, life, period [month])

Question 47

The point at which the net present value of an investment equals _______ is the internal rate of return.

A) -1
B) 0 
C) 0.1
D) 1

Question 48

After you select a cell with an error indicator,you can click the Error Checking _______ to display additional information about the possible error and determine if further action is needed.

A) button
B) icon 
C) ScreenTip
D) menu

Question 49

The _______ period is a quick method of projecting the value of an investment.

A) investment
B) payback 
C) cumulative
D) time-value

Question 50

If Charles sees which of the following,Seymour explains,there is a mistyped function name in the sheet.

A) #FNCT?
B) #FORM? 
C) #NAME?
D) #####

Question 51

Case 9-2
Skylar is studying for her midterm exam in her accounting class.Her study partner Lisa is her go-to person for help with calculating depreciation.
Which of the following functions does Lisa say is used to calculate a declining balance depreciation? 

A) DB
B) SLN 
C) SYD
D) DDB

Question 52

If active cell D12 contains the formula =D10+D11,cells D10 and D11 are _______ cells for D12.

A) feeder
B) dependent 
C) precedent
D) formula

Question 53

Seymour tells Charles to search all of the error values until he reaches one that lacks something,and that is the source of the error values in the dependent cells.What does that error value lack? 

A) contingencies
B) dependencies 
C) antecedents
D) precedents

Question 54

A(n)_______ arrow provides a visual clue to the relationship between two cells by pointing from the precedent cell to the dependent cell.

A) tracer
B) outline 
C) index
D) key

Question 55

Case 9-2
Skylar is studying for her midterm exam in her accounting class.Her study partner Lisa is her go-to person for help with calculating depreciation.
Which of the following functions does Lisa say is used to calculate a sum-of-years' digit depreciation? 

A) DB
B) SLN 
C) SYD
D) DDB

Question 56

Seymour tells Charles that all error values begin with the same symbol,so they can be easily identified as errors.What is the symbol? 

A) #
B) & 
C) ^
D) %

Question 57

The _______ function returns the sum-of-years' digit depreciation that results in a more accelerated depreciation than straight-line depreciation but less than declining balance depreciation.

A) DB
B) SLN 
C) SYD
D) VDB

Question 58

To calculate the internal rate of return,use the _______ function with the cost of the initial investment as the first cash flow value in a series.

A) IRR
B) XNPV 
C) NPV
D) XIRR

Question 59

Case 9-2
Skylar is studying for her midterm exam in her accounting class.Her study partner Lisa is her go-to person for help with calculating depreciation.
Which of the following functions does Lisa say is used to calculate a straight-line depreciation? 

A) DB
B) SLN 
C) SYD
D) DDB

Question 60

To evaluate a formula,you select the cell and then click the _______ button from the Formula Auditing group on the Formulas tab.

A) Define Formula
B) Select Formula 
C) Check Function
D) Evaluate Formula

Question 61

Does the NPV function in Excel correspond to the financial definition of net present value? Explain your answer.

Question 62

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates a loan's future value

Question 63

How do you determine which method of depreciation is most appropriate?

Question 64

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the internal rate of return for a series of unevenly spaced payments

Question 65

Case 9-2
Skylar is studying for her midterm exam in her accounting class.Her study partner Lisa is her go-to person for help with calculating depreciation.
Which of the following functions does Lisa say is used to calculate a double-declining balance depreciation? 

A) DDB
B) SLN 
C) SYD
D) VBD

Question 66

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the per period interest rate required to pay off a loan or reach an investment goal

Question 67

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
An interest rate that compares the value of current dollars to future dollars from a series of cash flows

Question 68

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the amount of a loan payment applied to the principal

Question 69

Describe the steps to interpolate a series of values between starting and ending values.

Question 70

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the amount of a loan payment used to pay off the interest

Question 71

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the payment in each period required to pay off a loan or reach an investment goal

Question 72

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Return rate for a series of future cash flows that will result in a net present value of zero

Question 73

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the present value of a series of future cash flows

Question 74

Case 9-2
Skylar is studying for her midterm exam in her accounting class.Her study partner Lisa is her go-to person for help with calculating depreciation.
Which of the following functions does Lisa say is used to calculate a depreciation if it is variable? 

A) DB
B) SLN 
C) SYD
D) VDB

Question 75

Identify the letter of the choice that best matches the phrase or definition.
a.PPMT function
b.rate of return
c.IPMT function
d.IRR
e.PV function
f.RATE function
g.PMT function
h.XIRR function
i.FV function
j.NPER function
Calculates the number of payments required to pay off a loan or reach an investment goal