FMVA Practice Exam

Below is a scored review of your assessment. All questions are shown.

Correct Answer Partially Correct Incorrect Answer

1 What is Gross Profit in 2028E using the assumptions listed above and on the Control Panel?

Your Answer $17,545 

Correct Answer $17,545 

Explanation
None.
2 What is EBITDA in 2022E using the assumptions listed above and on the Control Panel?

Your Answer $18,911 

Correct Answer $18,911 

Explanation
None.
3 What is Cash Generated From Operating Activities in 2025E using the assumptions listed above and on the Control Panel?

Your Answer $13,523 

Correct Answer $13,523 

Explanation
None.
4 What is the PP&E balance in 2030E using the assumptions listed above and on the Control Panel?

Your Answer $136,122 

Correct Answer $136,122 

Explanation
None.
5 What is the cash ratio in 2025E using the assumptions listed above and on the Control Panel?

Your Answer 4.9x 

Correct Answer 4.9x 

Explanation
None.
6 What is the margin impact ratio in 2026E using the assumptions listed above and on the Control Panel?

Your Answer 0.19x 

Correct Answer 0.19x 

Explanation
None.
7 What is the cash turnover ratio in 2029E using the assumptions listed above and on the Control Panel? Is it higher or lower than
the same ratio in 2020?

Your Answer 1.68x; higher 

Correct Answer 1.68x; higher 

Explanation
None.
8 What is the risk-free rate?

Your Answer 2.5% 

Correct Answer 2.5% 

Explanation
None.
9 Based on a discounted cash flow analysis and using the WACC as the discount rate, what is the implied equity value of
Company XYZ on January 1, 2021?

Your Answer $73,712 

Correct Answer $73,712 

Explanation
None.
10 What is the implied equity value at the transaction date (June 15, 2024) based on a discounted cash flow analysis using the
WACC as the discount rate, and assuming $50 million of cash and zero debt?

Your Answer $95,102 

Correct Answer $95,102 

Explanation
None.
11 Assuming an investment is made on June 15, 2024 in an amount equal to 1.5x the equity value at that date, what is the
investor IRR?

Your Answer -6.30% 

Correct Answer -6.30% 

Explanation
None.
12 Assuming an investment is made on June 15, 2024 in an amount equal to 1.5x the equity value at that date, what is the equity
IRR if the investment is funded with 70% debt?

Your Answer 12.0% 

Correct Answer 12.0% 

Explanation
None.
13 Where would ‘accounts payable’ most likely appear in a set of financial statements?

Your Answer In the balance sheet under 'current liabilities'

Correct Answer In the balance sheet under 'current liabilities'

Explanation
None.
14 What is an advantage to using a multi-step income statement?

Your Answer Net Income is shown before income taxes

Correct Answer Direct expenses and indirect expenses are broken out separately

Explanation
None.
15 What combination of keys turns the value in a cell into a percentage?

Your Answer ALT + H + P (PC) / Ctrl + Shift + % (Mac)

Correct Answer ALT + H + P (PC) / Ctrl + Shift + % (Mac)

Explanation
CTRL + H / Command + H - Replace

ALT + P / Ctrl + P – Opens page layout tab

ALT + M / Ctrl + M – Opens Formula Tab

16 Which of the following M&A transaction equations is correct?

Your Answer Value created = Hard synergies + Soft synergies – Transaction costs

Correct Answer Value created = Stand-alone value + Net synergies – Consideration (price paid)

Explanation
None.
17 Which of the following is NOT a form of subordinated debt?

Your Answer Revolver

Correct Answer Revolver

Explanation
A revolver is a type of senior debt
18 What is the weighted average cost of capital (WACC) for ABC Limited which has the following capital structure? $5m of equity
with a cost of equity of 15%; $2m of mezzanine finance with a cost of 9.5%; $1m of senior debt with a cost of debt of 7%.

Your Answer 12.63%

Correct Answer 12.63%

Explanation
WACC = (5/8) X 15% + (2/8) X 9.5% + (1/8) X 7% = 12.63%
19 Which ratio would you use to determine the profitability of the goods sold by a company?

Your Answer Gross profit margin

Correct Answer Gross profit margin

Explanation
Profitability from goods sold is determined by gross profit margin, which is (revenue - cost of goods sold) / Sales.
20 Which ratios indicate how efficiently the company generates sales from its assets?

Your Answer Quick asset ratio

Correct Answer Working capital turnover

Explanation
Working capital turnover = net sales / average working capital, so it signifies how much profit that is made compared to the working
capital that is employed.
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