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CTS130Chapter9Financ
Financial Functions
| Question | Answer |
|---|---|
| A higher discount rate means that future dollars are ___________ in comparison to current dollars. | discounted more |
| A positive cash flow, or ____________________, occurs whenever money is flowing into the account. | cash inflow |
| A _______ cash flow occurs when cash is going to the investor | regular |
| A(n) ____ arrow provides a visual clue to the relationship between two cells by pointing from the precedent cell to the dependent cell | tracer |
| A(n) ____ shows how much money a business makes or loses over a specified period of time. | income statement |
| A(n) ____ worksheet projects the company’s expected assets, liabilities, and equity. | balance sheet |
| A(n) ____________________ cash flow occurs whenever money is flowing out of the account. | negative |
| A(n) ____________________ is also known as a profit and loss statement. | income statement |
| A(n) ____________________ provides details about each loan payment, specifying how much of the payment is devoted toward interest and how much toward repaying the principal. | amortization schedule |
| After you select a cell with an error indicator, you can click the Error Alert ____ to display additional information about the possible error and determine if further action is needed | button |
| _________ include equipment, land, and delivery trucks | tangible assets |
| ____________ often format all entries as positive values, and then label the columns to indicate the values represent negative values | amortization schedules |
| As you repay a loan, each payment represents a ________ cash flow as you are sending money to the lending institution | negative |
| At higher rates of return, the net present value of the investment goes ______ | down |
| At rates beyond the internal rate of return, the net present value is ____, meaning that the expansion is no longer a good investment compared with the desired rate of return | negative |
| Both the NPV and the ______ functions assume the cash flows occur at evenly spaced intervals | irr |
| ____ is the symbol Excel uses to easily indicate an error | # |
| The ______________ error message indicates a mistyped function name. | #NAME? |
| These are the red tracer arrows that means there is an error in the value being received from the precedent cell or passed to the ____ cell. | dependent |
| _______ is concerned with the direction of the money as it moves in and out of the company. | cash flow |
| Cash flow is the movement of cash assets ____ an account. | into or out of |
| Excel supports ____ function(s) to calculate depreciation under different assumptions | five |
| Excel uses ____ to denote error indicators. | green triangles |
| _____ ____ is used to calculate the future value of a fund | fv |
| Financial functions format calculated values as currency, with ____ ________ appearing in red font | negative cash flow |
| If the NPER function returns the error value ________ a loan cannot be paid back in any length of time | #NUM! |
| If you are making periodic monthly payments, and the interest is compounded monthly, then the number of periods is in _______ | months |
| If you don’t include an fv value, Excel assumes a future value of ____ | 0 |
| If you know the beginning and ending values in a series and the series trend, you can fill in the missing values through ____________________ | interpolation |
| If you plan to invest money for 18 months, the value of the _____ argument in the PMT function is 18 | nper |
| In a(n) ____ trend, the values change by a constant amount. | linear |
| In a(n) ____ trend, values change by a constant percentage and usually appear as a curve | growth |
| In an amortization schedule, use _______ references to refer to the original loan conditions and use absolute references to refer to information about specific payment periods. | absolute |
| In comparing two investments, a commonly used guideline is to accept the investment with the ____. | higher NPV and higher IRR |
| 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 | type |
| Most Excel financial functions require a particular ____ to the cash flow to return the correct value | direction |
| The ____ function is used in calculating the net present value of a transaction, which is the current value of all the cash inflows and outflows in the investment adjusted by the time value of money. | NPV |
| The PMT value is also known as the ____ payment | periodic |
| The ____ function calculates the amount paid into an investment or loan during each payment period | PMT |
| The ____ function calculates the future value of an investment or loan. | fv |
| The ____ function calculates the interest rate charged or received during each payment period. | Rate |
| The ____ function calculates the number of payment periods in an investment or loan. | NPER |
| The ____ function returns a variable declining depreciation for any specified period using any specified depreciation method. | VDB |
| The ____ function returns the amount of a particular payment that is used to pay the interest on the loan. | IPMT |
| 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. | SYD |
| The ____ function takes these arguments: cost, salvage, and life. | SLN |
| The ____ period is a quick method of projecting the value of an investment. | Payback |
| The ____________________ argument specifies whether payments are made at the end of each period or at the beginning. | type |
| The ____________________ function calculates the amount of a loan payment used to pay off the principal of the loan | PPMT |
| The ____________________ function calculates the number of payment periods in an investment or loan. | NPER |
| The ____________________ is the amount of the loan that is still unpaid. | Principal |
| The company’s income after all expenses and taxes have been paid is called the ____. | net income |
| The difference between a company’s sales revenue and the cost of goods sold is the company’s ____. | gross profit |
| The difference between a loan and an investment is based on the direction of the ____________________. | cash flow |
| ____________________ is the difference between the present value of future cash flows and the current cost of the initial investment. | Net present value |
| The functions used to work with loans are the same ones you used to work with investments | the only difference is the direction of the _______ |
| The list of values in the ______ function must include at least one positive cash flow and one negative cash flow. | IRR |
| The point at which the net present value of an investment equals ____ is the internal rate of return. | 0 |
| The possibility that the entire transaction will fail, resulting in a loss of the initial investment is called the _________ | risk |
| The process of allocating the original cost of an investment over the years of use is known as ____. | depreciation |
| To ____ a series, the cells between the first and last cells in the series must be blank | interpolate |
| To calculate a series of values from a starting point without a defined ending point, you have to ____ the values. | extrapolate |
| To calculate a variable deprecation, use the ____ function. | VBD |
| To calculate an ________ multiply the value returned by the RATE function by the number of payments per year | annual rate |
| To calculate the _________ of an asset, you need to know an asset’s original cost and its useful life. | depreciation |
| 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. | irr |
| To choose between two or more investments, it’s a good idea to graph the ____ for each investment against different possible rates of return. | NPV |
| n To determine the interest rate needed to reach your savings goal, you can use the ____________________ function. | rate |
| To evaluate a formula, you select the cell and then click the ____ button from the Formula Auditing group on the Formulas tab. | evaluate formula |
| To project a trend that decreases rather than increases, use a step value between ____ for a growth trend | 0 and 1 |
| _______ disappear when you ____.correct the error source, insert or delete columns and rows, delete or move cells | tracer arrows |
| Use the XNPV and XIRR functions for cash flows that appear ____. | unvevenly spaced intervals |
| When an investment requires the investor to make multiple future payments, rather than a single initial payment, ___ | it may have several different possible internal rates of return |
| 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 _____ and the total months to pay off the loan. | month |
| When you borrow money, the money you receive represents a ____ cash flow. | positive |
| When you extrapolate a series, the ____ value represents the amount that each value is increased or multiplied as the series is extended. | step |
| When you extrapolate a series, you do not have to specify a(n) _______ | stopping value |
| With ____ depreciation, the asset depreciates by equal amounts each year of its lifetime until it reaches the salvage value. | straight-line |
| With the PMT function, the ____ argument is 0 when the payments are made at the end of each period. | type |
| You can calculate ______ payments on interest and principal using the CUMIPMT and CUMPRINC functions | cumulative |
| You can extrapolate a series of values from the _____ dialog box. | series |
| You can use the ____ function to estimate how much a dollar amount today is worth in future dollars. | fv |
| You can use the ____________________ Window to view the impact of a changing value in one worksheet on the cell values in the other cells. | watch |
| ____ depreciation depreciates an asset by a constant percentage each year rather than a constant amount | declining balance |
Created by:
galvanl
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