CEPA course Latest Update 2024 -2025 Actual Exam 250 Questions and 100% Verified Correct Answers Guaranteed A+ A _____ gift is one in which the person who received the gift has the unrestricted right to the immediate possession and use of it. - CORRECT ANSWER: c. Present interest gift A "C" Corporation is the best format to optimize the net proceeds from a transaction. (t/f) - CORRECT ANSWER: FALSE A "deliverable"includes which of the following characteristics? - CORRECT ANSWER: a. Represents the conclusion of an assignment, task, or action b. Displays what the client is paying for c. Provides recommendations on the next set of actions the client should take d. All the above (correct) A business attractiveness score of 67% is considered: - CORRECT ANSWER: d. Above average A business owner only needs one advisor to complete their exit planning process. (T/F) - CORRECT ANSWER: False! A business you are working with is doing $20,000,000 in adjusted gross sales and adjusted EBITDA is 10% to sales. Based on this financial performance and the personal, financial, business assessment recently completed, it has been determined the market mul tiple for this business is 5x adjusted EBITDA. Best in class companies in this industry are performing at 15% adjusted EBITDA to sales and are trading at 8x adjusted EBITDA. What is this companies profit gap? - CORRECT ANSWER: $1,000,000 A business you are working with is doing $20,000,000 in gross sales and adjusted EBITDA is 10% to sales. Based on this financial performance and the personal, financial, business assessment recently completed, it has been determined the market multiple for this business is 5x adjusted EBITDA. Best in class companies in this industry are performing at 15% adjusted EBITDA to sales and are trading at 8x adjusted EBITDA. What is this company's value gap? - CORRECT ANSWER: $14,000,000 A company will sell for a higher multiple when their sales are comprised of small, recurring purchases (T/F) - CORRECT ANSWER: a. True A company's desired exit channel should significantly impact its decisions regarding which areas of its operations it will invest, because it shouldn't invest in areas that would not be of interest to an acquirer. (t/f) - CORRECT ANSWER: FALSE A Confidential Information Memorandum (CIM) serves as? - CORRECT ANSWER: a. Preliminary due diligence document b. Sales document c. Communicates opportunities and weaknesses d. All of the above (correct) A father owns his business 100%. He has been married 35 years to the mother of his three children. The oldest child works in the business. When working with this family enterprise, who is the most important person to keep happy? - CORRECT ANSWER: d. The whole family A helpful framework to discuss when working with families is that fair does not always mean equal. (T/F) - CORRECT ANSWER: a. True A key difference between lifestyle businesses and value creator businesses is that value creator businesses usually generate better income. (T/F) - CORRECT ANSWER: True A management buy -in is a transaction example of minority recapitalization (T/F) - CORRECT ANSWER: b. False A private equity firm will use which financing combination to complete a transaction? - CORRECT ANSWER: Unable to tell, it is based upon the particular business transaction A retirement cash flow plan, which details the amount of, additions to and uses of investment assets, is most accurate when the following is used in the analysis - CORRECT ANSWER: Statistical modeling A strategy which makes assets difficult or impossible to reach is called: - CORRECT ANSWER: d. Asset protection According the Exit Planning Institute State of Owner Readiness Survey, what percentage of owners had no written transition plan? - CORRECT ANSWER: 83% According to EPI's first national State of Owner Readiness Survey, what percentage of business owners have done no exit planning - CORRECT ANSWER: 49% According to the Exit Planning Institute State of Owner Readiness Survey, what percentage of business owners are expected to transition over the next 10 years? - CORRECT ANSWER: 76% According to the Family Firm Institute, what percentage of family transitions survive into the second generation? - CORRECT ANSWER: 30% Accounts, attorneys, and financial planners and all examples of advisors that should be added to the team starting in the _______ gate of the value acceleration process. - CORRECT ANSWER: c. Discover After you finish the personal, financial, and business readiness and attractiveness interview with the business owner during the Discovery phase of the value acceleration process, what should you do - CORRECT ANSWER: Use the scores to justify where the business places in the range of value, determined in the business valuation All exit planning teams should contain a family therapist. (T/F) - CORRECT ANSWER: b FALSE An owner must sell a majority position to complete a recapitalization or refinance option (T/F) - CORRECT ANSWER: b FALSE As categorized by the Fisher College of Business at the Ohio State University, what are the three types of companies in the marketplace? - CORRECT ANSWER: d. Investors, Innovators, Efficiency Experts Asset protection is a continuum that includes balancing equity, asset, and jurisdictional changes (T/F) - CORRECT ANSWER: A. true Assume your client Jim, owns a company that manufactures heavy duty steel shelving for warehouse and distribution centers. Jim is 70 years old. One of his goals is to maximize the selling price of his company at the time of sale. The company has revenues o f $18 million and pre -tax income of $2 million. The company has no debt and all of its assets have been fully depreciated. Jim pays himself a salary of $1 million. A buyer couple hires a CEO to do Jim's job for approximately $250,000. Jim's wife, Sarah, is 60 years old and is listed on the payroll as office manager, but she only comes into the office once every couple of weeks. Sarah receives a salary of $75,000. Jim and his wife expense approximately $80,000 in personal items through the business. Assume that buyers of companies like this expect a 25% rate of return on their investments. What is the ball park value (no need to do a discounted cash flow analysis) fo - CORRECT ANSWER: A $11,620,000 Assume your client Jim, owns a company that manufactures heavy duty steel shelving for warehouse and distribution centers. Jim is 70 years old. One of his goals is to maximize the selling price of his company at the time of sale. The company has revenues o f $18 million and pre -tax income of $2 million. The company has no debt and all of its assets have been fully depreciated. Jim pays himself a salary of $1 million. A buyer couple hires a CEO to do Jim's job for approximately $250,000. Jim's wife, Sarah, is 60 years old and is listed on the payroll as office manager, but she only comes into
