1. What is the formula for calculating the future value of an investment?
A) FV = PV x (1 + r)^n
B) FV = PV / (1 + r)^n
C) FV = PV x (1 - r)^n
D) FV = PV / (1 - r)^n
Answer: A) FV = PV x (1 + r)^n
2. What is the formula for calculating the present value of a future cash flow?
A) PV = FV / (1 + r)^n
B) PV = FV x (1 + r)^n
C) PV = FV / (1 - r)^n
D) PV = FV x (1 - r)^n
Answer: A) PV = FV / (1 + r)^n
3. What is the formula for calculating the net present value of a project?
A) NPV = ∑ (CFt / (1 + r)^t)
B) NPV = ∑ (CFt x (1 + r)^t)
C) NPV = ∑ (CFt / (1 - r)^t)
D) NPV = ∑ (CFt x (1 - r)^t)
Answer: A) NPV = ∑ (CFt / (1 + r)^t)
4. What is the formula for calculating the internal rate of return of a project?
A) IRR = ∑ (CFt / (1 + r)^t) = 0
B) IRR = ∑ (CFt x (1 + r)^t) = 0
C) IRR = ∑ (CFt / (1 - r)^t) = 0
D) IRR = ∑ (CFt x (1 - r)^t) = 0
Answer: A) IRR = ∑ (CFt / (1 + r)^t) = 0
5. What is the formula for calculating the return on investment?
A) ROI = (Gain from Investment - Cost of Investment) / Cost of Investment
B) ROI = (Gain from Investment + Cost of Investment) / Cost of Investment
C) ROI = (Gain from Investment - Cost of Investment) / Gain from Investment
D) ROI = (Gain from Investment + Cost of Investment) / Gain from Investment
Answer: A) ROI = (Gain from Investment - Cost of Investment) / Cost of Investment
6. What is the formula for calculating the gross margin?
A) Gross Margin = (Revenue - Cost of Goods Sold) / Revenue
B) Gross Margin = (Revenue + Cost of Goods Sold) / Revenue
C) Gross Margin = (Revenue - Cost of Goods Sold) / Cost of Goods Sold
D) Gross Margin = (Revenue + Cost of Goods Sold) / Cost of Goods Sold
Answer: A) Gross Margin = (Revenue - Cost of Goods Sold) / Revenue
7. What is the formula for calculating the operating profit margin?
A) Operating Profit Margin = (Operating Profit / Revenue)
B) Operating Profit Margin = (Operating Profit + Revenue)
C) Operating Profit Margin = (Operating Profit - Revenue)
D) Operating Profit Margin = (Operating Profit x Revenue)
Answer: A) Operating Profit Margin = (Operating Profit / Revenue)
8. What is the formula for calculating the expected return using the Capital Asset Pricing Model?
A) Expected Return = Risk-Free Rate + Beta x (Expected Market Return - Risk-Free Rate)
B) Expected Return = Risk-Free Rate - Beta x (Expected Market Return - Risk-Free Rate)
C) Expected Return = Risk-Free Rate + Beta x (Expected Market Return + Risk-Free Rate)
D) Expected Return = Risk-Free Rate - Beta x (Expected Market Return + Risk-Free Rate)
Answer: A) Expected Return = Risk-Free Rate + Beta x (Expected Market Return - Risk-Free Rate)
9. What is the formula for calculating the weighted average cost of capital?
A) WACC = (E/V x Re) + (D/V x Rd)
B) WACC = (E/V x Re) - (D/V x Rd)
C) WACC = (E/V x Re) + (D/V x Re)
D) WACC = (E/V x Rd) + (D/V x Rd)
Answer: A) WACC = (E/V x Re) + (D/V x Rd)
10. What is the formula for calculating earnings per share?
A) EPS = (Net Income - Preferred Dividends) / Total Shares Outstanding
B) EPS = (Net Income + Preferred Dividends) / Total Shares Outstanding
C) EPS = (Net Income - Preferred Dividends) / Total Assets
D) EPS = (Net Income + Preferred Dividends) / Total Assets
Answer: A) EPS = (Net Income
11. What is the accounting equation?
A) Assets = Liabilities - Equity
B) Assets = Liabilities + Equity
C) Assets = Equity - Liabilities
D) Assets = Liabilities + Revenues - Expenses
Answer: B) Assets = Liabilities + Equity
12. How is revenue recognized?
A) Revenue = Cash Received - Accounts Receivable
B) Revenue = Cash Received + Accounts Receivable
C) Revenue = Cash Received - Accounts Payable
D) Revenue = Cash Received + Accounts Payable
Answer: B) Revenue = Cash Received + Accounts Receivable
13. What is the matching principle?
A) Expenses = Cost of Goods Sold - Operating Expenses
B) Expenses = Cost of Goods Sold + Operating Expenses
C) Expenses = Operating Expenses - Cost of Goods Sold
D) Expenses = Operating Expenses + Cost of Goods Sold
Answer: B) Expenses = Cost of Goods Sold + Operating Expenses
14. How is cost of goods sold calculated?
A) COGS = Beginning Inventory - Purchases + Ending Inventory
B) COGS = Beginning Inventory + Purchases - Ending Inventory
C) COGS = Beginning Inventory - Purchases - Ending Inventory
D) COGS = Beginning Inventory + Purchases + Ending Inventory
Answer: B) COGS = Beginning Inventory + Purchases - Ending Inventory
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15. What is the formula for gross profit?
A) Gross Profit = Revenue - COGS
B) Gross Profit = Revenue + COGS
C) Gross Profit = COGS - Revenue
D) Gross Profit = COGS + Revenue
Answer: A) Gross Profit = Revenue - COGS
16. How is operating profit calculated?
A) Operating Profit = Gross Profit - Operating Expenses
B) Operating Profit = Gross Profit + Operating Expenses
C) Operating Profit = Operating Expenses - Gross Profit
D) Operating Profit = Operating Expenses + Gross Profit
Answer: A) Operating Profit = Gross Profit - Operating Expenses
17. What is the formula for net income?
A) Net Income = Operating Profit - Taxes
B) Net Income = Operating Profit + Taxes
C) Net Income = Taxes - Operating Profit
D) Net Income = Taxes + Operating Profit
Answer: A) Net Income = Operating Profit - Taxes
18. How is return on equity calculated?
A) ROE = Net Income / Total Equity
B) ROE = Net Income / Total Assets
C) ROE = Net Income / Total Liabilities
D) ROE = Net Income / Total Revenue
Answer: A) ROE = Net Income / Total Equity
19. What is the formula for asset turnover ratio?
A) Asset Turnover Ratio = Revenue / Total Assets
B) Asset Turnover Ratio = Revenue / Total Liabilities
C) Asset Turnover Ratio = Revenue / Total Equity
D) Asset Turnover Ratio = Revenue / Total Expenses
Answer: A) Asset Turnover Ratio = Revenue / Total Assets
20. How is current ratio calculated?
A) Current Ratio = Current Assets / Current Liabilities
B) Current Ratio = Current Assets / Total Liabilities
C) Current Ratio = Current Assets / Total Equity
D) Current Ratio = Current Assets / Total Assets
Answer: A) Current Ratio = Current Assets / Current Liabilities
21. What is the formula for debt-to-equity ratio?
A) Debt-to-Equity Ratio = Total Debt / Total Equity
B) Debt-to-Equity Ratio = Total Debt / Total Assets
C) Debt-to-Equity Ratio = Total Debt / Total Liabilities
D) Debt-to-Equity Ratio = Total Debt / Total Revenue
Answer: A) Debt-to-Equity Ratio = Total Debt / Total Equity
22. How is inventory turnover ratio calculated?
A) Inventory Turnover Ratio = COGS / Average Inventory
B) Inventory Turnover Ratio = COGS / Total Inventory
C) Inventory Turnover Ratio = COGS / Total Assets
D) Inventory Turnover Ratio = COGS / Total Liabilities
Answer: A) Inventory Turnover Ratio = COGS / Average Inventory
23. What is the formula for accounts payable turnover ratio?
A) Accounts Payable Turnover Ratio = COGS / Average Accounts Payable
B) Accounts Payable Turnover Ratio = COGS / Total Accounts Payable
C) Accounts Payable Turnover Ratio = COGS / Total Assets
D) Accounts Payable Turnover Ratio = COGS / Total Liabilities
Answer: A) Accounts Payable Turnover Ratio = COGS / Average Accounts Payable
24. How is accounts receivable turnover ratio calculated?
A) Accounts Receivable Turnover Ratio = Revenue / Average Accounts Receivable
B) Accounts Receivable Turnover Ratio = Revenue / Total Accounts Receivable
C) Accounts Receivable Turnover Ratio = Revenue / Total Assets
D) Accounts Receivable Turnover Ratio = Revenue / Total Liabilities
Answer: A) Accounts Receivable Turnover Ratio = Revenue / Average Accounts Receivable
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