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Financial Modeling I Midterm Exam Solutions - Tuesday

The document provides instructions and questions for a 2.5 hour financial modeling exam with 40 multiple choice questions. It includes details on the exam format, calculator and materials allowed, and references Excel files containing financial data to answer questions testing skills like lookups, indexing, grouping, regression analysis and formatting.

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100% found this document useful (1 vote)
413 views12 pages

Financial Modeling I Midterm Exam Solutions - Tuesday

The document provides instructions and questions for a 2.5 hour financial modeling exam with 40 multiple choice questions. It includes details on the exam format, calculator and materials allowed, and references Excel files containing financial data to answer questions testing skills like lookups, indexing, grouping, regression analysis and formatting.

Uploaded by

julie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ryerson University

Financial Modeling I

Midterm Exam – Tuesday Class

Fall 2015

There are 2.5 hours in this exam.

Student Name ____________________________________


(Please Print)

Student Number ____________________________________

Notes:

1. This is a closed book exam. You may only have pens, pencils and a calculator at
your desk as well as one 8” by 11 ½” cheat sheet (both sides).
2. Please fill out the scanner sheet as you go along in the exam. You will not be given
extra time at the end of the exam to fill it out.
3. Only the scanner sheet will be marked. Anything written on the question sheet will
be totally disregarded.
4. Select the best possible answer for each multiple-choice question
5. Each of the 40 questions is worth 1 mark for a total of 40 marks.

There are 12 pages in this exam.


Refer to the Sales Calculator tab in the FIN631 Midterm Excel file to answer the next 8 questions. You
are given three data bases. The first is a partially completed transactions sales database (there is only
one sale per day). The second is a product price and commissions database (each product has its own
price and commission rate). The third links the sales person to the province in which they sell
product. You will need to calculate the dollar sales value for each day by looking up the appropriate
product price and commission rate in table two and using the formula at the top of the spreadsheet. I
would then suggest that you use Pivot Tables / Sorting /Filtering to answer the questions - although
this is not the only way to find the answers.

Before Beginning please change the Tax Rate from 15% to 13%.

1) Which of the following formulas, using “VLOOKUP”, could be entered into cell E11 and
copied down to determine the Province in which each sale took place? (1 mark)
a) =VLOOKUP(D11,$N$11:$O$19,MATCH($E$10,$N$10:$O$10,0))
b) =VLOOKUP(D11,$N$11:$O$19,MATCH($E$10,N10:O10,0),0)
c) =VLOOKUP(D11,$N$11:$O$19,MATCH($E$10,$N$10:$O$10,0),0)
d) =VLOOKUP(D11,$N$11:$O$19,MATCH($E$10,$N$10:$O$10,1),0)
e) =VLOOKUP(D11,N11:O19,MATCH($E$10,$N$10:$O$10,0),0)

2) Which of the following formulas, using “INDEX”, could be entered into cell G11 and copied
down to determine the Commission rate for each sale? (1 mark)
a) =INDEX($J$11:$L$41,MATCH(B11,$J$11:$J$41,0),MATCH($G$10,$J$10:$L$10,0))
b) =INDEX($J$11:$L$41,2,MATCH($G$10,$J$10:$L$10,0))
c) =INDEX($J$11:$L$41,MATCH(B11,$J$11:$J$41,0),MATCH(G10,$J$10:$L$10,0))
d) =INDEX($J$11:$L$41,MATCH(B11,$J$11:$J$41,0),3)
e) =INDEX(J11:L41,MATCH(B11,$J$11:$J$41,0),MATCH($G$10,$J$10:$L$10))

3) What is the dollar sale amount for October 1st, 2015? (1 mark)
a) $7,356.25
b) $8,312.56
c) $7,898.53
d) $8,805.41
e) $9,664.33

4) What is the total revenue in October 2015? (1 mark)


a) $106,492.91
b) $111,223.91
c) $115,992.22
d) $119,077.26
e) $128,212.76

2
5) You would like to find the average number of units sold per transaction by sales person
Alan. Which of the following formulas would accomplish this task? (1 mark)
I. =averageifs($C$11:$C$102,$D$11:$D$102,”Alan”)
II. =sum(($D$11:$D$102 = “Alan”),$C11:$102) array entered using CTRL + SHIFT +
ENTER
III. =sumproduct(($D$11:$D$102 = “Alan”)*$C$11:$C$102)
IV. =sum(($D$11:$D$102 = “Alan”)*$C$11:$102)/SUM($D$11:$D$102=”Alan”)
V. =SUMPRODUCT(($D$11:$D$102="Alan")*$C$11:$C$102)/SUM(--
($D$11:$D$102="Alan")) array entered using CTRL + SHIFT + ENTER
a) I only
b) II only
c) I and III
d) I and IV
e) I and V

6) What is the total number of units sold by sales person “Mike” in Nova Scotia? (1 mark)
a) 50
b) 61
c) 71
d) 84
e) 96

7) Ontario makes up what percentage of total dollar sales? (1 mark)


a) 17.9%
b) 10.2%
c) 14.6%
d) 19.5%
e) 12.3%

8) John sells what percentage of Ontario’s dollar sales? (1 mark)


a) 44.7%
b) 47.8%
c) 55.4%
d) 59.1%
e) 100%

3
Refer to the “Grouping” tab in the Midterm Exam Excel file to answer the next 2 questions. A
busy downtown coffee and pastry shop has collected transactions sales data over a two day
period (October 13 and 14, 2015). Each of the transactions has been time stamped. The
manager of the shop would like you to answer the following 2 questions:

9) Over the two day period, on average, during which hour does the greatest number of
transactions occur? (1 mark)
a) 8:00 am to 9:00 am
b) 11:00 am to 12:00 noon
c) 12:00 noon to 1:00 pm
d) 6:00 pm to 7:00 pm
e) 7:00 pm to 8:00 pm

10) Over the two day period, what it the total dollar sales amount between 6:00 pm and 7:00
pm? (1 mark)
a) $955.10
b) $1,085.35
c) $1,106.40
d) $1,494.95
e) $1,736.45

11) Which of the following formulas will return the last day (i.e. 28, 30, 31) of a month? For
example if we wanted to find the last day of November, 2013, the answer should be 30. Let
yr = 2013, mth = 11, day = 1. (1 mark)

I. =eomonth(date(yr,mth+1,0),0)
II. =day(eomonth(date(yr,mth,day),0))
III. =day(date(yr,mth,day-1))
IV. =day(edate(date(yr,mth,day),0))
V. =day(date(yr,mth+1,0))

a) I only
b) II only
c) I and III
d) II, III and IV
e) II and V

4
12) You have some sales data in the range $A$1: $D$50. You want to find the sum of the 3rd
column of this range. Which of the following formulas would accomplish this task? (2 mark)

I. =sum(index($A$1:$D$50,,3))
II. =sum(index($A$1:$D$50,3,))
III. =sum(offset($A$1,,2,counta($A:$A)))
IV. =sum(offset($A$1,2,,counta($A:$A)))
V. =sum(offset($A$1,2,,50))

a) I only
b) II only
c) I and III
d) I and IV
e) II and V

13) You have sales data in cells $A$1 to $L$10 (i.e. 10 rows by 12 columns). Assume you have
named this range "data". Which of the following formulas would accomplish the same
objective as “=sum(offset($A$1,1,5,,6))”. (1 mark)
a) =sum(index(data,2,))
b) =sum(index(data,,2))
c) =sum(index(data,2,6):index(data,2,11))
d) =sumproduct(index(data,2,6):index(data,2,12))
e) =sum(index(data,2,))-sum(index(data,2,12))

14) How do you reference an entire column of an Excel Table? (1 mark)


a) Name of the Table followed by a dot followed by the column name
b) Name of the Table followed by the column name in round brackets
c) Name of the Table followed by the column name in square brackets
d) Name of the Table followed by the ordinal number of the column in brackets
e) None of the above

15) If you want to display all the values of an array returned by an array formula, you must: (1
mark)
a) Use a named formula
b) Select a range equal in size to the array and then array enter the formula
c) Use ALT+SHIFT+ENTER instead of CTRL+ENTER
d) Write a VBA subroutine
e) None of the above will work

5
16) Which of following shortcuts is correct: (1 mark)
I. Open VBA Editor: ALT + F11
II. Convert to Table: CTRL + T
III. Create Pivot Table: ALT + N + V
IV. Apply Currency Formatting: CTRL + SHIFT + 4
V. Refresh a Pivot table: ALT + F5

a) I, II and III
b) I, III and IV
c) I, II, III and IV
d) I, II, III and V
e) They are all correct

Refer to the “Fixed vs. Variable Costs” worksheet in the Midterm Exam Excel File to answer
the next 3 questions. You are given historical income statement data over a 6 year period.
Your objective is to create an alternative income statement model that breaks total costs
down into Fixed and Variable Costs. To do this you need to run the following single variable
regression:

TOC t=α + β × Salest + ε t

where: TOC(t) = Total Operating Costs at time t = COGS(t) + SG&A(t) + Depr(t)

Sales(t) = Sales at time t

and estimate alpha and beta.

17) What are your estimated fixed costs? (1 mark)


a) $390.8
b) $445.7
c) $479.5
d) $496.9
e) $510.2

18) If Sales were $1,250, what is your estimated EBIT? (1 mark)


a) $81
b) $102
c) $136
d) $152
e) $169

6
19) What is your breakeven EBIT? (i.e. what sales level will give you an EBIT of zero?) (1 mark)
a) $850
b) $928
c) $991
d) $1,114
e) $1,264

20) Which of the following are valid names for ranges


I. Name
II. myName
III. Range
IV. AB12
V. C
VI. My Name
VII. R1C1
VIII. Sum

a) I, II and III
b) I, II, III and VIII
c) I, II, III, IV and VI
d) I, II, VI, VII and VIII
e) II, IV, V, VI and VII

21) Which shortcut opens the Paste Names dialog box? (1 mark)
a) SHIFT + F3
b) CTRL + F3
c) ALT + F3
d) CTRL + G
e) F3

22) What is the shortcut that opens the format cells dialog box? (1 mark)
a) F3
b) CTRL + F3
c) CTRL + P
d) CTRL + 1
e) CTRL + SHIFT + 4

7
23) Consider the following custom formatting string:

$#,##0.0;($#,##0.0);”zero”;

How would the following four entries be displayed in Excel? (1 mark)

1234.69, -12345678, 0, mike

a) $1234.6, $12345678, zero, mike


b) $1,234.7, ($12,345,678.0), zero ,
c) $1,234.7, $(12,345,678.0), zero, mike
d) $1234.7, (12,245,678), 0, mike
e) $1234.7, ($12,345,678.0), 0,

24) Which reference operators are available in Microsoft Excel? (1 mark)


a) Range operator, intersection operator and lookup operator
b) Range operator, array operator and union operator
c) Range operator, intersection operator and union operator
d) Range operator, intersection operator and join operator
e) None of the above

Use the following information for the following 3 questions: In the Midterm Exam Excel file, go to the
sheet tab named “Data Base”. This database contains monthly sales data for all products (various
fresh fruits), for all provinces to which the firm delivers.

25) You are interested in finding the total sales of Apples or Pears in Ontario or Quebec for
January (i.e. month 1). To begin you wish to create a formula in cell F7 that will return
“TRUE” or “FALSE” depending on whether all of your criteria are true for the first record.
You will then copy this formula down for all the other records. Which of the following
formulas will accomplish your objective? (1 mark)
a) AND(A7=1,OR(B7="Apples",B7="Pears"),OR(C7="Ontario",C7="Quebec"))
b) AND(A7=1,OR(B7="Apples",B7="Pears"),AND(C7="Ontario",C7="Quebec"))
c) OR(A7=1,OR(B7="Apples",B7="Pears"),OR(C7="Ontario",C7="Quebec"))
d) AND(A7=1,AND(B7="Apples",B7="Pears"),OR(C7="Ontario",C7="Quebec"))
e) OR(A7=1,AND(B7="Apples",B7="Pears"),AND(C7="Ontario",C7="Quebec"))

8
26) You realize that you could accomplish the same logic using Boolean comparisons and that
you could then combine this with the function “SUMPRODUCT” to find the total sales of
Oranges and Grapes in Ontario and Quebec in January (i.e. month 1). Which of the
following formulas would accomplish your goal? (1 mark)
a) =SUMPRODUCT(((B7:B1997="Oranges")*(B7:B1997="Grapes"))+((C7:C1997="Ontario")+
(C7:C1997="Quebec")),D7:D1997)
b) =SUMPRODUCT((A7:A1997=1)+((B7:B1997="Oranges")+
(C7:C1997="Grapes"))*((C7:C1997="Ontario")+(C7:C1997="Quebec")),D7:D1997)
c) =SUMPRODUCT((A7:A1997=12)*((B7:B1997="Oranges")*(B7:B1997="Grapes"))*((C7:C1
997="Ontario")+(C7:C1997="Quebec"))*D7:D1997)
d) =SUMPRODUCT((A7:A1997=1)*((B7:B1997="Oranges")+
(B7:B1997="Grapes"))*((C7:C1997="Ontario")*(C7:C1997="Quebec"))*D7:D1997)
e) =SUMPRODUCT((A7:A1997=1)*((B7:B1997="Oranges")+
(B7:B1997="Grapes"))*((C7:C1997="Ontario")+(C7:C1997="Quebec")),D7:D1997)

27) What are the total sales of Apples and Bananas in Ontario and Quebec in the first quarter
(i.e. months 1, 2 and 3)? (1 mark)
a) $1,473,887
b) $1,567,647
c) $1,044,388
d) $1,201,475
e) $1,634,071

28) How does Excel’s worksheet calculation engine represent Boolean values internally? (1
mark)
a) -1 is FALSE and 0 is TRUE
b) 0 is FALSE and 1 is TRUE
c) -1 is FALSE and 1 is TRUE
d) 2 is FALSE and 1 is TRUE
e) There is no internal representation of Boolean values: the calculation engine handles
them as Boolean values

29) One way to ensure that correct data is entered into a cell or range is to use the Excel data
____ feature. (1 mark)
a) Security
b) Validation
c) Index
d) Concatenation
e) Error Checking

9
Refer to the “Inglis’ Forest Products” worksheet in the Midterm Exam Excel File. You are given partially
completed Historical and Proforma Financial Statements and some ratios. The assumptions are to the
right of the financial statements, as usual. You will be forecasting the financial statements forward two
years. Please assume that the forecasting factors apply to both forecast years. Complete the missing
components of the model and make sure the balance sheet balances. Use Excess Cash and Marketable
Securities as the balancing plug on the assets side and the Revolver (Short Term Debt) as the plug on the
Liability and Equity side of the Balance Sheet. You can use any of the technique developed in class to
find the appropriate plug values but neither plug should ever be negative. Also, if one plug has a
positive balance the other plug should be zero. You would never have a positive balance is both
accounts at the same time.

All of the forecasting factors are already entered into the model. However, I would like you to change
the following forecasting factors:

Forecasting Factor Base Case (i.e. Parameter Your Case: (i.e. Parameter
values currently being used values you should enter for
in the Midterm Excel File – your midterm exam)
Master)

Course Paper Volume Growth Rate 5% 3%

Ground Wood Volume Growth Rate 5% 4%

Course Paper Average Selling Price 0% 0%


Growth Rate

Ground Wood Average Selling Price 0% 1%


Growth Rate

Gross Profit Margin 9.5% 10%

Dividend Payout Ratio 0% 0%

Capital Expenditures as a % of Sales 1% 2%

Long Term Debt Repayments $3,333.33 $2,000

Use the Integrated Financial Model you develop to answer the remaining questions:

30) What are projected Sales for 2017? (1 mark)


a) $114,067
b) $146,334
c) $148,182
d) $149,958

10
e) $150,003

31) What are the Additions to Retained Earnings for 2017? (1 mark)
a) $503.8
b) $539.6
c) $572.5
d) $611.1
e) $639.2

32) What is the Accumulated Depreciation for 2017? (1 mark)


a) $23,786.9
b) $24,548.7
c) $25,835.1
d) $26,996.2
e) $27,892.3

33) What is the Retained Earnings for 2017? (1 mark)


a) $2,651.6
b) $2,720.2
c) $2,832.2
d) $2,944.7
e) $3,096.5

34) What is the Total Asset Turns ratio for 2017? (1 mark)
a) 0.8
b) 0.9
c) 1.0
d) 1.1
e) 1.2

35) What is the Revolver (Short Term Debt) balance in 2017? (1 mark)
a) $11,231.0
b) $12,659.9
c) $13,705.7
d) $14,978.6
e) $15,958.2

36) What is the Cash Flow from Investing Activities in 2017? (1 mark)
a) $2,701.2
b) $2,804.9

11
c) $2,872.9
d) $2,901.5
e) $2,945.5

37) What is the Cash Flow from Financing Activities in 2017? (1 mark)
a) $460.2
b) $532.1
c) $967.3
d) $1,369.9
e) $1,611.1

38) What is the Cash Flow to Equity for 2017? Comes from the rearrangement of the
Accounting Cash Flow Statement to form the Equity Cash Flow Statement. (1 mark)
a) $0.0
b) $113
c) $127
d) $131
e) $136

39) What is the Cash Flow to Creditors for 2017? (1 mark)


a) $619.4
b) $692.8
c) $769.4
d) $799.6
e) $901.3

40) I would like you to change your model so that the Depreciation expense is calculated as 8%
of the average of last year’s and this year’s Net Plant, Property and Equipment. What are
Total Assets in 2017? (1 mark)
a) $103,911.1
b) $104,468.9
c) $105,616.9
d) $106,310.5
e) $107,691.4

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