.
.
.
.
.
100
When determining the required return for a specific type of asset or investment, some valuators use the growth rate as a proxy. In what scenario is the growth rate commonly used as a proxy?
A) When the growth rate is variable and unpredictable.
B) When the growth rate is constant and insignificant.
C) When the growth rate is constant and significant.
D) When the growth rate is unrelated to the asset or investment.
C) When the growth rate is constant and significant.
100
Which of the following is a basis of Terminal Value?
a) Replacement Value
b) Reproduction Value
c) Liquidation Value
d) All of the above
c) Liquidation Value
100
Who is normally a financial modeler?
a. Economist
b. Supply Chain Analysts
c. Business Strategist
d. All of the above
a. Economist
100
Which of the following statement/s is/are true?
Statement 1: Drivers and assumptions can be established by conducting a financial analysis.
Statement 2: Usual growth indicators used are: inflation, population growth, GNP or GDP growth.
Statement 3: Growth drivers are normally based on the country.
Statement 4: In the Philippines, information about population is available in the Philippine Population Authority.
A. Statement 1 only
B. Statements 1 and 2
C. Statements 1, 2, and 3
D. All statements are true
B. Statements 1 and 2
100
BONUS!
Subject Code and Description of this subject
Ex. AUD 324 - Auditing in CIS Environment
A-PRE 3 - Valuation Concepts and Methods
200
Statement 1: Financial models do not provide results.
Statement 2: Microsoft Word can be used in calculating enterprise value.
Statement 3: Scenario analysis determines how different values of an independent variable affect a particular dependent variable under a given set of assumptions.
a. Only Statement 1 is true
b. Only 2 statements are true
c. All statements are false
d. All statements are true
c. All statements are false
200
True or False Identification Quiz
Statement 1: The Title Page of a financial model typically includes necessary information to secure the proprietary rights of the modeler or the firm.
Statement 2: The Data Key Results sheet in a financial model contains only the valuation results and scenarios, but not sensitivity analysis.
Statement 3: Pro-forma Financial Statements typically include only two components: Statement of Income and Statement of Financial Position.
a) One statement is true
b) Two statements are false
c) All statements are false
d) One statement is false
d) One statement is false
200
BONUS!
Age of Sir Mikko
24
200
Statement 1: Sensitivity analysis is useful exercise in developing absolute amount
Statement 2: Scenarios will be developed based on the set of possible occurrences.
Statement 3: Sensitivity analysis and scenario modeling are identical processes, with sensitivity analysis involving the selection of drivers or few drivers to check the impact on results while scenario modeling explores various possible occurrences.
a. All statements are true
b. Only 1 statement is true
c. All statements are false
d. 2 statements are true
b. Only 1 statement is true
200
Which of the following statements describes the Terminal Value?
Statement 1: The value of a company at the end of a specific period
Statement 2: The value of a company beyond the explicit forecast period
Statement 3: To determine the value of a company's debt obligations at the end of the forecast period
Statement 4: To capture the value of a company's future cash flows beyond a specific point in time, assuming it will continue to operate and generate returns indefinitely
a.) Statements 1 and 3
b.) Statements 2 and 4
c.) Statements 2 and 3
d.) Statements 1 and 4
b.) Statements 2 and 4
300
True or False Identification Quiz
Statement 1: The Assumption Sheet in a financial model is primarily used to summarize the results of the study.
Statement 2: Supporting Schedules in a financial model are limited in number due to the constraints of electronic financial models.
Statement 3: The Data Key Results sheet in a financial model contains only valuation results and does not include scenarios or sensitivity analysis.
a) One statement is true
b) Two statements are false
c) All statements are false
d) One statement is false
c) All statements are false
300
BONUS
Full name of the Accountancy Program Dean
Dr. Lilibeth D. Tindoy, CPA
300
True or False Identification Quiz
Statement 1: In financial modeling, the Discounted Cash Flow (DCF) method is commonly used to determine the value of a company.
Statement 2: The Weighted Average Cost of Capital (WACC) is calculated by weighing the costs of debt and equity with their amounts in the company's capital structure.
Statement 3: Enterprise value is computed by subtracting all discounted net cash flows.
a) One statement is true
b) Two statements are false
c) All statements are false
d) One statement is false
d) One statement is false
300
Which of the following statement/s is/are true?
I. In Order to develop Financial Models, one of the following steps that needs to be observed is gather historical information and references.
II. Historical Information may be generated from, but not limited to the following: financial statements, corporate disclosures, contracts, and peer information.
III. The financial Model must be able to filter the information that would be necessary for valuation.
IV. Corporate Disclosure provides more context and even supports the risk identified or will be assumed in the valuation process.
A. All statements are true
B. Only one statement is true
C. Only two statements are true
D. Only three statements are true
C. Only two statements are true
300
Which of the following statements are correct?
Statement 1: Valuators with extensive experience in certain types of investments may use alternative bases to determine the reasonable terminal value.
Statement 2: Guesstimates are a valid approach in determining the reasonable terminal value.
Statement 3: There is no universally perfect approach to determine the terminal value.
Statement 4: The valuation method is the sole determinant of the final value, with negotiation playing a minor role.
a. Statements 1 and 3
b. Statements 1, 2, and 3
c. Statements 1, 2, and 4
d. All Statements are correct
b. Statements 1, 2, and 3
400
D. 91,740,000
400
B. 104,390,000
400
D. 528.333
400
Net cash flow of the firm - 1,200,000
Proceeds from preferred shares issuance - 500,000
Proceeds from Borrowing – 240,000
Additional information:
- Dividends on preferred shares is 40% of the proceeds from preferred shares issuance.
- Debt service is 5% of the borrowings.
what is the net cash flow to the equity?
a) 1,628,000
b) 1,648,000
c) 1,748,000
d) 1,728,000
d) 1,728,000
400
Frema's Red Lipstick Inc. projected volume of lipstick to be sold in Year 1 is 120,000 units, assuming 5% growth every year, and the estimated required return of 12%. The lipstick is sold at Php45 per unit with a cash net income margin of 15%. Frema's equipment is capable of producing the volume required for 10 years. It was noted that the company has outstanding debt of Php500,000. Compute for the enterprise value for a 5-year forecast period?
Round the peso amount to the nearest peso.
Round the PV to four decimal places.
a. 3,191,456
b. 3,237,249
c. 3,595,893
d. 3,670,745
a. 3,191,456