1. Computational Methods for Financial Applications SCC 2301 Frederick H. Willeboordse phyfhw@nus.edu.sg

2. Quiz 1 In Lecture 1, we discussed the income statement Quiz 1 What is Golden Dragon’s Cost of Sales? ?

3. Quiz 1 - Answer In Lecture 1, we discussed the income statement Quiz 1 - answer What is Golden Dragon’s Cost of Sales? Answer: $6,000.-

4. Quiz 2 In Lecture 2, we discussed the balance sheet Quiz 2 1)True or false: Owners Equity is an asset. 2)I set up a (wholly owned) company with $20,000 in cash. Since then, I made a profit of $562 and paid out $400 in dividends. What are the retained earnings? ?

5. Quiz 2 - answer In Lecture 2, we discussed the balance sheet Quiz 2 - answer 1)True or false: Owners Equity is an asset. False. 2)I set up a (wholly owned) company with $20,000 in cash. Since then, I made a profit of $562 and paid out $400 in dividends. What are the retained earnings? $162.- ?

6. Quiz 3 In Lecture 3, we discussed the Cash Flow Statement Quiz 3 1)True or False: Dividends do not appear on the Income Statement and hence not on the Cash Flow Statement either. 2)Is it possible to find the Net Cash Flow (which is the sum of the cash flows in the Cash Flow Statement) from the Balance Sheet(s) of a company. ?

7. Quiz 3 - answer In Lecture 3, we discussed the Cash Flow Statement Quiz 3 - answer 1)True or False: Dividends do not appear on the Income Statement and hence not on the Cash Flow Statement either. FALSE 2)Is it possible to find the Net Cash Flow (which is the sum of the cash flows in the Cash Flow Statement) from the Balance Sheet(s) of a company. YES

8. Quiz 4 In Lecture 4, we discussed the Cash Budget Quiz 4 1)True or False: Dividends are not part of the ‘normal’ operational costs of a company and hence do not appear in the Cash Budget. 2)True of False: The Cash Budget predicts the future cash needs with absolute certainty. ?

9. Quiz 4 - answer In Lecture 4, we discussed the Cash Budget Quiz 4 1)True or False: Dividends are not part of the ‘normal’ operational costs of a company and hence do not appear in the Cash Budget. FALSE 2)True of False: The Cash Budget predicts the future cash needs with absolute certainty. FALSE ?

10. Quiz 5 In Lecture 5, we discussed the Cash Budget Quiz 5 1)True or False: When sales increase, fixed costs rise as quickly as variable costs. 2)What is the net income of a company when it breaks even? ?

11. Quiz 5 - answer In Lecture 5, we discussed the Cash Budget Quiz 5 1)True or False: When sales increase, fixed costs rise as quickly as variable costs. FALSE 2)What is the net income of a company when it breaks even? 0. ?

12. Quiz 6 In Lecture 6, we discussed ratios Quiz 6 What is Aunt Petunia’s Gross Profit Margin? ?

13. Quiz 6 - answer In Lecture 6, we discussed ratios Quiz 6 What is Aunt Petunia’s Gross Profit Margin? It is: (Sales – Cost of Sales)/Sales = 54.9%

14. Quiz 7 In Lectures 7 we discussed Stocks Quiz 7 Over any thirty year holding period, which had the worst recorded performance: bonds or stocks? ? Answer with ONE word!

15. Quiz 7 – answer In Lectures 7 we discussed Stocks Quiz 7 Over any thirty year holding period, which had the worst recorded performance: bonds or stocks? Answer with ONE word! Bonds

16. Quiz 8 In Lecture 8, we discussed Bonds Quiz 8 When interest rates go up, does the market-value of a bond go up or down? ? Answer with one word!

17. Quiz 8 In Lecture 8, we discussed Bonds Quiz 8 When interest rates go up, does the market-value of a bond go up or down? Answer with one word! Down

18. Quiz 9 In Lecture 10, we discussed inflation Quiz 9 Assume that you have $2400.- in cash at the beginning of 2003 and that inflation is expected to run at the rates indicated to the right. In today’s dollars, how much is your money worth at the end of 2005? ? Expected Inflation Rates 2003: 20% 2004: 25% 2005: 33% 1-31-3 Note: You won’t need a calculator for this

19. Quiz 9 In Lecture 10, we discussed inflation Quiz 9 Assume that you have $2400.- in cash at the beginning of 2003 and that inflation is expected to run at the rates indicated to the right. In today’s dollars, how much is your money worth at the end of 2005? Expected Inflation Rates 2003: 20% 2004: 25% 2005: 33% 1-31-3 2400 * 5/6 = 2000 2000 * 4/5 = 1600 1600 * 3/4 = 1200

20. Quiz 10 Let’s not forget our Excel skills Quiz 10 If we copy and paste the formula in D1 into D2, what is the value that will be displayed? ? ABCD 1 2093 =$A$1*$B1 +C1 2 8512

21. Quiz 10 Let’s not forget our Excel skills Quiz 10 If we copy and paste the formula in D1 into D2, what is the value that will be displayed? ? ABCD 1 2093 =$A$1*$B1 +C1 2 8512 112