MBA 620 Mid Term Review || Questions and 100% Accurate Answers.
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Course
MBA 620
Institution
MBA 620
Future Value (FV) correct answers PV(1+r)^n
Present Value (PV) correct answers FV/(1+r)^n
FV= cash flow for the period
r= the rate in percentage
n= the period
nominal rate of return correct answers the rate of return expressly ignores potential changes in the purchasing power of associ...
MBA 620 Mid Term Review || Questions and 100% Accurate
Answers.
Future Value (FV) correct answers PV(1+r)^n
Present Value (PV) correct answers FV/(1+r)^n
FV= cash flow for the period
r= the rate in percentage
n= the period
nominal rate of return correct answers the rate of return expressly ignores potential changes in
the purchasing power of associated currency
compounding correct answers accumulation of the time value over multiple periods
discount rate correct answers used to get FV back to PV
perpetuity correct answers a stream of cash flows that goes on forever
PV of Perpetuity Formula correct answers Cf/r
Cf= the amount that is going to be paid
r= rate
tells us how much we would be willing to pay for a security
annuity correct answers has an end
annuity formula in excel correct answers =pv(rate,nper,0)
rate= is given in percent
nper= how long the payment will last
0= added to end of the formula because there is no payment after the end
FV (Excel Formula) correct answers FV(rate,nper,pmt,[pv],[type])
Rate Required. The interest rate per period.
Nper Required. The total number of payment periods in an annuity.
Pmt Required. The payment made each period; it cannot change over the life of the annuity.
Typically, pmt contains principal and interest but no other fees or taxes. If pmt is omitted, you
must include the pv argument.
, Pv Optional. The present value, or the lump-sum amount that a series of future payments is
worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt
argument.
Type Optional. The number 0 or 1 and indicates when payments are due. If type is omitted, it is
assumed to be 0.
income statement correct answers documents the company's financial activity over a given
accounting period
balance sheet correct answers reflects the company's financial position, assets, liabilities, and
shareholder equity of a particular date
statement of cash flows correct answers presents the firm's cash flows over a given period
ROE correct answers return on equity
measures the overall business performance, specifically management's ability to generate profits
for shareholders
ROE calculated by correct answers net income/total shareholder's equity
ROA (return on investment) correct answers indicator of company's profitability relative to its
assets or total capital employed in the firm. Indicates how efficiently management uses the
company's assets to generate earnings.
return on investments calculated by correct answers company's earnings/total assets
net profit margin tells us correct answers profit for every dollar of sales after accounting for all
costs
gross profit margin tells us correct answers amount of profit that is left to cover other expenses
after only the cost of goods sold is subtracted from revenues
how to calculate gross profit margin correct answers gross profit/sales
Operating efficiency correct answers 2nd factor in ROE
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