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FINANCIAL STATEMENT MODELING
EXAM 2026 QUESTIONS AND
ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
Which are the two points that identify the break even unit sales? -
correct answer-1. Where the Sales revenue line crosses the Total
costs line
2. Where accounting profit hits zero and changes from negative to
positive
What is the formula for accounting profit? - correct answer-
Revenue - Total Costs, because
Describe and Explain the relationship between NPV and Year 1
Unit Sales - correct answer-They have a direct relationship
because PV of Net cash flows rises as year 1 unit sales rises
Is NPV more sensitive to Year 1 Unit sales or year 2 sales growth
rate? - correct answer-NPV is more sensitive to growth rate
because growth rate is compounded
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List the general steps used to forecast the financial statements -
correct answer-1. Use financial statements to find which income
statement items and balance sheet items are close to being a
constant percentage of sales and which aren't
2 Forecast sales
3. Apply average historic percentage of sales to generate most of
the income statement and balance sheet
4. Use forecasting to generate the rest of teh statements
5. Make balance sheet balance by calculating longer term debt
6. Raise or lower the portion of equity relatiev to the portion of
debt by raising/lowering paid in capital
List 6 major individual income statement and balance sheet items
that are not constant percentages of sales - correct answer-1.
Depreciation
2. Interest Expense
3. Taxes
4. Property Plant and Equipment
5. Short Term Debt
6. Long term debt
FINANCIAL STATEMENT MODELING
EXAM 2026 QUESTIONS AND
ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
Which are the two points that identify the break even unit sales? -
correct answer-1. Where the Sales revenue line crosses the Total
costs line
2. Where accounting profit hits zero and changes from negative to
positive
What is the formula for accounting profit? - correct answer-
Revenue - Total Costs, because
Describe and Explain the relationship between NPV and Year 1
Unit Sales - correct answer-They have a direct relationship
because PV of Net cash flows rises as year 1 unit sales rises
Is NPV more sensitive to Year 1 Unit sales or year 2 sales growth
rate? - correct answer-NPV is more sensitive to growth rate
because growth rate is compounded
, Page | 2
List the general steps used to forecast the financial statements -
correct answer-1. Use financial statements to find which income
statement items and balance sheet items are close to being a
constant percentage of sales and which aren't
2 Forecast sales
3. Apply average historic percentage of sales to generate most of
the income statement and balance sheet
4. Use forecasting to generate the rest of teh statements
5. Make balance sheet balance by calculating longer term debt
6. Raise or lower the portion of equity relatiev to the portion of
debt by raising/lowering paid in capital
List 6 major individual income statement and balance sheet items
that are not constant percentages of sales - correct answer-1.
Depreciation
2. Interest Expense
3. Taxes
4. Property Plant and Equipment
5. Short Term Debt
6. Long term debt
