If you want to test how an increase in percentage of cost of good sold affects the contribution margin, you would

use
________. Sensitivity analysis

When performing a scenario analysis, which of the following tools/functions in Excel is used to create a dropdown list
where we can select the live case? Data Validation

You should perform sensitivity analysis when:

You need to determine which assumptions matter the most

The formula contained in the yellow highlighted cell (I39) is = 1. ( 2. , I9,I24). This formula can be copied over to the entire live
scenario section without any manual modification. (Hint: do not forget to use absolute references.)
CHOOSE
$I$4

What is the share price when the discount rate is 13% and revenue growth is 15%?
36.70

What is the share price when COGS increases by 5%?

29.29

The formula contained in the YELLOW cell (G179) is ___________ Hint: do not forget the $ when using absolute references. Use
absolute reference so this formula can be copied over to other cells in this section without any manual modification.
=SMALL($F$177:$F$180,E179)

The formula contained in the ORANGE cell (H178) is = 1. ($A$177:$G$180, 2. ( 3. ,$F$177:$F$180,0),MATCH($A$177,$A$177:

$F$177,0))
Hint: do not forget the $ when using absolute references.
INDEX
MATCH
G178

What type of chart did we use to build a tornado chart?

Stacked bar chart

Rank the assumptions (drivers) according to sensitivity from lowest to highest.

Revenue
COGS
Discount Rate
EV/EBITDA
1. Discount Rate
2. EV/EBITDA
3. COGS
4. Revenue growth

The chart type we used to build the football field chart was? Stock chart - Open-high-low-close

What is the weighted average cost of capital if a business has a cost of equity of 12%, a cost of debt of 10%, tax rate
of 25%, 20 million market value of debt, and 60 million market value of equity? 10.9%

What is the cost of equity using the capital asset pricing model if the risk free rate is 4.5%, the beta is 1.75 and the
equity risk premium is 4.25%? 11.94%

Which of the following is the correct definition for free cash flows to the firm? EBIT x (1 - Tax Rate) + Depreciation +/-
Changes in Working Capital – Capex

How do you find the terminal value using the EV/EBITDA exit multiple? Terminal EV = EV/EBITDA x EBITDA value of
final year of forecast

Assuming a company has no other funding sources other than debt and common equity, what is the difference
between enterprise value and equity value? All interest bearing debt less cash and equivalents

Please sort the following into pros for comparable company analysis and pros for precedent transaction analysis.
 Comparable company analysis

Observable current value for a company (what investors are actually paying for business right now)

Large number of potential companies to compare to

Readily available

Precedent transaction analysis

Includes takeover premium / control premium

Includes synergy value

Shows the value investors paid for the entire company (not just 1 share)

Please sort the following into PEST Analysis, Porter's 5 Forces, Competitive Advantage Analysis and SWOT
Analysis

A. PEST
B. Porter's 5 Forces
C. Competitive Advantage Analysis
D. SWOT Analysis

Weaknesses

Economic Forecasting

Cost Leadership

Differentiation

Social Forecasting

Opportunities
B

Potential new entrants and barriers to entry

Technological Forecasting

Suppliers and their bargaining power

Based on the course, which of the following ratios commonly estimates the terminal value in a discounted cash flow
(DCF) analysis? EV/EBITDA

What is the net debt? 225 million

What is the enterprise value? 1,350 million

What is the enterprise value-to-revenue (EV/Sales) multiple? 0.9

What is the enterprise value-to-EBIT (EV/EBIT) multiple? 7.5

What is the price-to-earnings (P/E) multiple? 9

What is the price-book (P/B) multiple? 1.55

What is the share price when the enterprise value-to-sales (EV/Sales) multiple of a comparable company is 0.8?

What is the share price when the enterprise value-to-sales (EV/Sales) multiple of a comparable company is 0.8?
10.75

What is the share price when the price-to-earnings (P/E) multiple of a comparable company is 6.5? 12.2

Calculate the terminal value using the EV/EBITDA multiple method. 593,555

Calculate the terminal value using the perpetual growth method. 611,363

Calculate the intrinsic enterprise value using the average of terminal values derived from the EV/EBITDA multiple and
perpetual growth methods. 451,512

Company A has 279,000 basic shares outstanding and 26,000 outstanding options and warrants. The exercise price
of these options is $3.75. The company also has $200,000 of convertible bonds with an effective conversion price of
$4.00. The average market share price for the reporting period is $7.50. What is the diluted shares outstanding using
the treasury stock method & if-converted methods? 342,000

A commonly used multiple utilized in comparable company analysis is: EV/EBITDA

Please sort the following into factors most applicable for comparable company analysis and factors most applicable
for precedent transaction analysis: (A) Comparable Company Analysis; (B) Precedent Transaction Analysis
Review Later
A

Difficult to adjust for intangibles (i.e. strength of management, growth potential)

A

Valuation multiples reflect real M&A transactions

A
 Valuation Multiples reflect trading multiples on the public markets
B

Potentially reveals information about market demand for certain types of assets and industry trends
B

May include special purchaser considerations, such as synergies

A. Comparable Company Analysis

B. Precedent Transaction Analysis

Lifesaver Inc., a producer of personal protective equipment, trades on the TSX Venture stock exchange at an
EV/EBITDA multiple of 4.0x. From performing a precedent transaction analysis, you note that recent acquisitions of
similar companies have transacted at an EV/EBITDA multiple of 6.0x. The following is not a valid potential reason for
this discrepancy: Multiples implied by precedent transactions are not relevant when considering publicly traded companies

Which of the following is not an important factor to assess when identifying appropriate precedent transactions?
Accretive/dilutive effect of the transaction on the acquirer

Which of the following is not a likely indicator of a highly relevant comparable company? Similar level of management
experience

Match the transaction cost items with the appropriate impact on the financial statements.

Review Later
B

Directly reduce the equity balance on the balance sheet

C

Amortized annually on the income statement over the term of the related instrument
A

Expensed as incurred on the income statement

A. Debt Change-of-control Premium

B. Equity Financing Fees
C. Debt Financing Fees

Calculate the transaction value (in $ thousands) of a theoretical company based on the information provided below.
$100,600

Based on the above information, what is the Enterprise Value of Alibaba Group Holding Limited? Be sure to write down your answer, as you'll require
it to calculate the next question's answer. $563,481

 Given the previously calculated Enterprise Value, what is the NTM EV/EBITDA multiple for Alibaba
Group Holdings Limited? 2.7x

Through a comparable company analysis for Alibaba, you determined a P/E ratio of 6.0x is appropriate
to value the company. Based on this metric, what is the implied Enterprise Value of Alibaba? 

Tip: P/E Ratio * Earnings = Equity Value $740,366

Total expected equity financing for Amazon’s purchase of Walmart, at the assumed 50-50% equity and debt financing
deal mix provided, is as follows: $241,356

Total transaction costs, based on the assumptions provided, are expected to be: $22,002
Which of the following transaction costs will not be included in the pro-forma adjustment to net earnings? Equity
financing fees

The incremental annual depreciation expense as a result of Amazon’s acquisition of Facebook, is expected to be:
$36,847

Additional annual interest expense due to new debt issued in relation to the transaction is:7482

The total after-tax pro-forma adjustment to Amazon’s net earnings is expected to be:31109

The adjusted pro-forma net earnings for Amazon Inc. is expected to be: 22711

The implied enterprise value of Snap Inc., calculated using the assumptions and acquisition premium provided, is:
91669

The expected pro-forma share price of Amazon is expected to be: 3099.40

The pro-forma enterprise value of Amazon Inc. is expected to be: $1,769,316

Pro-forma FY+1 EPS for Amazon Inc. is expected to be:36.77

The effect of the transaction on FY + 1 EPS for Amazon Inc. is as follows: Dilutive by 19.57%

Pro-forma cash flow per share for Amazon Inc. is expected to be: 130.33

The effect of the transaction on FY + 1 CFPS for Amazon Inc. is as follows: Dilutive by 3.28%

Which of the following item is typically not included in a Public Information Book (PIB)? Discounted cash flow model

Which of the following is not a key component of the merger model we walked through in the course? Creating
detailed multi-year forecasts for both companies

Budgets must link ________ to objectives, so budgeting is a tactical implementation of the ________. Strategies,
business plan

Identify which of the following is NOT a good way for managers to use a budget. Managers can use budgets alone to
estimate how well they perform over a period of time

Which of the following is the best key performance indicator (KPI) for measuring customer satisfaction? Customer
retention rate

Which of the following components is not necessary to have in every master budget? Direct material purchases budget

Which of the following describes the correct budgeting process? Planning & communication – Establish objectives &
targets – Develop a detailed budget – Review & approval – Implementation and management

In a bottom-up approach, managers should have a ________ level of controllability and a ________ level of
involvement in budget setting. High, high
Identify which trait below about incremental budgeting is FALSE. Inputs or activities are determined by the budgeted
outputs

What is the main argument of "Beyond Budgeting"? Firms today need to be more flexible and responsive to deal with
unpredictable change, hyper competition and increasingly fickle customers

Out of the four different types of costs, how would you classify overhead costs? (Hint: Overhead costs are
unavoidable costs a company must spend to produce any amount of outputs up to a certain level. There’s usually a
threshold where the outputs exceed the maximum capacity which requires additional spending for every extra unit of
outputs.) Semi-variable cost

What does variable cost with economies of scale mean? The higher the volume of output, the more it costs to produce
one extra unit

Identify which of the following is NOT an advantage of performing multiple regression. It is easy to use and audit

Using the PEST analysis, which of the following should a company like Apple Inc. worry about the most?
Technological forecasting and trends

Identify the cause of an unfavorable variance in profit. Actual material cost is higher than budget

Using the information given in the table below, identify whether the sales volume variance and price variance are
favorable or unfavorable. Unfavorable, favorable

Based on the information provided, calculate the revenue variance percentage and determine whether it is favorable
or unfavorable. 16.67% favorable

Identify which of the following is not a goal of the variance dashboard. A detailed written report

To find out the value of the assumptions that are needed to hit a certain budget target, you would use ______; to
optimize an output, you would use ______. Goal seek, solver

Which of the following is NOT an advantage to link workbooks? The links will update themselves when the file name
changes

Use simple linear regression to estimate the relationship between promotion and revenue for ABC Company. What will the revenue be when the promotion cost is
150? 1059.51 Use the same Excel data in the previous question and run a multiple regression to estimate the
relationship between promotion, advertising (independent variables) and revenue (dependent variable). Calculate the
revenue if the promotion cost is $150 and the advertising cost is $250. 1060.83

Inputs should be blue colored font and should have ________ only. Process and outputs should be in black colored
font and have _______ only. hardcoded numbers only, formulas only

The annual accounts payable is 4,800; the annual revenue is 75,000, and the gross profit margin is 40%. The
payable days estimated from the data above is ______. 39

The annual accounts receivable is 3,000; the annual sales  40,000, and the gross profit margin is 40%. 

The receivable days estimated from the data above are _____. 24.7

The opening balance of Company A is 25,000, and the repayment is scheduled for 1,000 per month at an annual
interest rate of 5%. Use the average debt balance to calculate the interest payment.

The closing balance of debt at the end of the month is _____ and the interest payment is _____. 24,000; 102
To arrive at operating cash flows, you should start with _______, _______ non-cash items and then adding or
subtracting changes in working capital. net income, adding

From the chart above, decision makers should pay most attention to the month: sep 2018

The PP&E gross book value at the start of the month is 60,000, and the CAPEX of the month is 12,000. The
accumulated depreciation at the start of the month is 25,000; the depreciation expense of the month is 750.
The net book value of PP&E calculated from the data above is _____. 46250

Data validation works for setting a reasonable range for _______. Inputs

The chart above is an example of a combination of a ________ chart and a ________ chart. stacked column, line

Before protecting a worksheet to avoid people from editing the formulas, you must ________. unlock the input cells

If you want to test how an increase in percentage of cost of good sold affects the contribution margin, you would use
________. Sensitivity analysis

When performing a scenario analysis, which of the following tools/functions in Excel is used to create a dropdown list
where we can select the live case? Data Validation

You should perform sensitivity analysis when:

You need to determine which assumptions matter the most

The formula contained in the yellow highlighted cell (I39) is = 1. ( 2. , I9,I24). This formula can be copied over to the entire live
scenario section without any manual modification. (Hint: do not forget to use absolute references.)
CHOOSE
$I$4

What is the share price when the discount rate is 13% and revenue growth is 15%?
36.70

What is the share price when COGS increases by 5%?

29.29

The formula contained in the YELLOW cell (G179) is ___________ Hint: do not forget the $ when using absolute references. Use
absolute reference so this formula can be copied over to other cells in this section without any manual modification.
=SMALL($F$177:$F$180,E179)

The formula contained in the ORANGE cell (H178) is = 1. ($A$177:$G$180, 2. ( 3. ,$F$177:$F$180,0),MATCH($A$177,$A$177:

$F$177,0))
Hint: do not forget the $ when using absolute references.
INDEX
MATCH
G178

What type of chart did we use to build a tornado chart?

Stacked bar chart

Rank the assumptions (drivers) according to sensitivity from lowest to highest.

Revenue
COGS
Discount Rate
EV/EBITDA
2. Discount Rate
2. EV/EBITDA
3. COGS
4. Revenue growth