FIN143 · Quantitative Practice Exams

This uses revenue LTV and omits gross margin.

This uses the cost percentage rather than gross margin.

This annualizes churn while leaving revenue on a monthly basis.

This reverses the LTV/CAC ratio.

This annualizes churn while leaving revenue on a monthly basis.

This uses revenue LTV and omits gross margin.

This reverses the LTV/CAC ratio.

This uses the cost percentage rather than gross margin.

This adds the refund when the refund should reduce the liability.

This omits the opening deferred-revenue balance.

This omits the refund of an unearned customer payment.

This reverses the effects of cash collection and revenue recognition.

This reports net change as a percentage rather than ending cohort ARR divided by beginning cohort ARR.

This is gross retention; it omits expansion within the starting cohort.

This omits subscription contractions.

This includes new-customer ARR, which is excluded from NRR.

This includes noncash depreciation in a cash break-even calculation.

This ignores variable delivery and support costs.

This charges a historical equipment purchase against the current month’s operating cash break-even.

This divides fixed costs by variable cost instead of contribution per customer.

This ignores positive quarterly cash inflows and overstates the cumulative funding need.

This is the net cash need and ignores issuance fees.

This covers only the first quarter and ignores the later cash trough.

This deducts a fee from the cash need rather than increasing gross proceeds to cover the fee.

This includes new debt issuance in FCFF.

This deducts after-tax interest even though FCFF is a pre-financing cash flow.

This omits the depreciation add-back after using EBIT.

This adds the working-capital investment rather than subtracting it.

This divides total growth by years rather than compounding.

This uses one fewer compounding period than specified.

This mixes the target gross profit with current revenue.

This is the total growth over the entire horizon.

This reports net change as a percentage rather than ending cohort ARR divided by beginning cohort ARR.

This omits subscription contractions.

This is gross retention; it omits expansion within the starting cohort.

This includes new-customer ARR, which is excluded from NRR.

This deducts after-tax interest even though FCFF is a pre-financing cash flow.

This adds the working-capital investment rather than subtracting it.

This omits the depreciation add-back after using EBIT.

This includes new debt issuance in FCFF.

This reverses the effects of cash collection and revenue recognition.

This adds the refund when the refund should reduce the liability.

This omits the opening deferred-revenue balance.

This omits the refund of an unearned customer payment.

This is the number lost from the starting cohort, not the number remaining.

This includes new customers even though the question asks only about the starting cohort.

This applies churn repeatedly to the original balance rather than the shrinking cohort.

This omits the final month’s churn.

This fails to divide acquisition spending by the number of customers acquired.

The revenue input is already monthly. Multiplying the answer by 12 confuses months and years.

This uses revenue rather than gross profit as the monthly recovery of acquisition cost.

This treats the cost-of-revenue percentage as gross margin.

This omits the final month’s churn.

This is the number lost from the starting cohort, not the number remaining.

This applies churn repeatedly to the original balance rather than the shrinking cohort.

This includes new customers even though the question asks only about the starting cohort.

This ignores positive quarterly cash inflows and overstates the cumulative funding need.

This covers only the first quarter and ignores the later cash trough.

This is the net cash need and ignores issuance fees.

This deducts a fee from the cash need rather than increasing gross proceeds to cover the fee.

This omits cash collected before revenue recognition, reflected in the deferred-revenue increase.

This fails to add back noncash stock compensation included in net income.

This adds an increase in receivables instead of subtracting it.

This deducts equipment purchases from operating cash flow; they are investing cash flows.

This equates recognized revenue with collections and ignores the receivables increase.

This incorrectly includes financing cash in customer collections.

This adds the increase in receivables; the increase represents revenue not yet collected.

This omits collections of beginning accounts receivable.

This assumes representatives generate customers during the three-month training period.

This omits one month of revenue for every acquisition cohort.

This counts each new customer for only one month.

This treats every contract signed during April–December as producing a full 12 months of revenue.

This incorrectly includes financing cash in customer collections.

This adds the increase in receivables; the increase represents revenue not yet collected.

This omits collections of beginning accounts receivable.

This equates recognized revenue with collections and ignores the receivables increase.

This omits one month of revenue for every acquisition cohort.

This counts each new customer for only one month.

This assumes representatives generate customers during the three-month training period.

This treats every contract signed during April–December as producing a full 12 months of revenue.

This applies the multiple before normalizing the one-time items.

This gives enterprise value before the cash-and-debt bridge.

This adds a nonrecurring gain instead of removing it.

This subtracts the one-time expense again instead of adding it back.

This discounts the exit for only three years.

This reports enterprise value rather than equity value.

This treats an end-of-Year-4 exit value as cash today.

This includes the exit but omits the explicit forecast cash flows.

This compares undiscounted receipts instead of present values.

This subtracts delivery costs from only one option even though those costs are identical.

This omits the incremental upfront administration cost.

This reverses the requested comparison: prepayment minus annual billing.

This reverses the excess-cash and debt adjustments.

This adds debt even though debt holders have a prior claim.

This is enterprise value before the bridge to equity.

This applies a forward revenue multiple to trailing revenue.

This is enterprise value; it omits the cash-and-debt bridge.

The terminal value is at the end of Year 3, not Year 4.

This fails to discount terminal value from the end of Year 3 to today.

The cash flow is already Year 4 FCFF; growing it again advances it an extra year.

This ignores the investor’s future ownership dilution.

This is post-money value; the question asks for pre-money value.

This treats exit enterprise value as exit equity value.

This treats the annual target return as simple interest instead of compounding it over the holding period.

This uses one fewer year than the actual holding period.

This averages the total return arithmetically instead of compounding.

This is the cumulative holding-period return, not annual IRR.

Company revenue growth is not the investor’s cash-flow IRR.

This uses an arithmetic average instead of compound annual EPS growth.

This uses Year 3 EPS to calculate P/E despite the stated current-EPS convention.

This substitutes the peer median P/E for the subject company’s P/E.

This uses revenue growth instead of EPS growth.

This treats the payments as occurring at year-end instead of year-beginning.

This discounts an already calculated present value a second time.

This moves the payments two periods earlier rather than one.

This adds nominal payments without discounting.

This treats the Year 3 asset sale as cash received today.

This omits the separate terminal asset sale.

This reports PV of future inflows without deducting the initial investment.

This sums undiscounted cash flows.

This reverses B minus A.

This compares undiscounted cash totals.

This values incremental inflows but omits the larger initial investment.

This reports Project B’s standalone NPV rather than its incremental NPV over A.

This reverses the excess-cash and debt adjustments.

This applies a forward revenue multiple to trailing revenue.

This is enterprise value before the bridge to equity.

This adds debt even though debt holders have a prior claim.

This treats exit enterprise value as exit equity value.

This ignores the investor’s future ownership dilution.

This treats the annual target return as simple interest instead of compounding it over the holding period.

This is post-money value; the question asks for pre-money value.

This uses an arithmetic average instead of compound annual EPS growth.

This uses revenue growth instead of EPS growth.

This uses Year 3 EPS to calculate P/E despite the stated current-EPS convention.

This substitutes the peer median P/E for the subject company’s P/E.

This uses a present-value annuity factor for a future accumulation target.

This ignores interest earned on earlier deposits.

This uses the annual rate as the monthly rate.

This assumes beginning-of-month deposits rather than the stated month-end deposits.

This uses three-year total EPS growth rather than annual compound growth.

This inputs growth as a decimal rather than percentage points, inflating PEG by 100×.

This uses forecast EPS in P/E instead of the required current EPS.

This uses growth in total net income and ignores forecast share dilution.

This includes the exit but omits the explicit forecast cash flows.

This treats an end-of-Year-4 exit value as cash today.

This discounts the exit for only three years.

This reports enterprise value rather than equity value.

Company revenue growth is not the investor’s cash-flow IRR.

This uses one fewer year than the actual holding period.

This averages the total return arithmetically instead of compounding.

This is the cumulative holding-period return, not annual IRR.

This compares undiscounted receipts instead of present values.

This reverses the requested comparison: prepayment minus annual billing.

This subtracts delivery costs from only one option even though those costs are identical.

This omits the incremental upfront administration cost.

This omits debt from the enterprise-to-equity bridge.

This drops the negative Year 1 FCFF.

This adds terminal value without discounting it to today.

This adds restricted operating cash as though it were excess distributable cash.

This double-counts B in the denominator.

This omits B, the old-price equivalent of new consideration.

This reverses the numerator and denominator.

This applies full-ratchet protection instead of weighted-average protection.

This ignores the pre-money option-pool top-up.

This includes the top-up but omits new investor shares.

This sizes the reserve as a percentage of old pre-money shares instead of final post-financing shares.

This subtracts the entire target pool again even though an existing pool is already included.

This ignores the SAFE ownership sold before the round.

This sequentially dilutes the SAFEs, contrary to the stated post-money convention.

This subtracts priced-round dilution as percentage points instead of multiplying the remaining founder stake.

This is founder ownership before the priced-round dilution.

This assumes the outside commitment is the total round rather than adding the insider’s check.

This applies the ownership percentage to company value rather than solving for the incremental investment.

This uses the other holders’ ownership percentage.

This is total round proceeds, not the existing investor’s check.

This applies the preferred cap but ignores the higher available conversion payout.

This gives the investor both its preference and a full common share of total exit proceeds.

This is the payout to the remaining shareholders.

This ignores the participation cap while retaining preferred status.

This treats nonparticipating preferred as participating preferred.

This is the payout to other holders, not the preferred investor.

This pays both the full preference and full as-converted share.

This chooses the less valuable option rather than the greater available payout.

This excludes accrued interest from the conversion amount.

This uses the discount price even though the cap produces a lower conversion price.

This uses the new investors’ price without either note protection.

This applies the discount to the cap price, stacking protections that are alternatives.

This assumes straight conversion and omits participation after the preference.

This is the distribution to the other shareholders.

This pays only the preference and ignores participation.

This calculates participation on all exit proceeds, double-counting the preference amount.

This is founder ownership before the priced-round dilution.

This subtracts priced-round dilution as percentage points instead of multiplying the remaining founder stake.

This sequentially dilutes the SAFEs, contrary to the stated post-money convention.

This ignores the SAFE ownership sold before the round.

This pays Series A in full although insufficient cash remains after the senior claim.

This is the residual for common holders after preferences.

This is the senior Series B claim, not Series A’s payout.

This uses a pro-rata split even though the claims have different seniority.

This is the percentage held by all pre-round fully diluted holders, not founders alone.

This gives the pre-round founder percentage.

This omits the unissued option reserve from post-round fully diluted shares.

This subtracts an investment/pre-money ratio instead of issuing new shares and recomputing the denominator.

This includes the top-up but omits new investor shares.

This ignores the pre-money option-pool top-up.

This sizes the reserve as a percentage of old pre-money shares instead of final post-financing shares.

This subtracts the entire target pool again even though an existing pool is already included.

This ignores the participation cap while retaining preferred status.

This gives the investor both its preference and a full common share of total exit proceeds.

This applies the preferred cap but ignores the higher available conversion payout.

This is the payout to the remaining shareholders.

This pays Series A in full despite the equal-ranking shortfall allocation.

This is Series B’s pro-rata payout.

This incorrectly pays Series B first as a senior claim.

Equal ranking does not mean equal dollars when claim sizes differ.

This pays Series A in full despite the equal-ranking shortfall allocation.

Equal ranking does not mean equal dollars when claim sizes differ.

This is Series B’s pro-rata payout.

This incorrectly pays Series B first as a senior claim.

This excludes accrued interest from the conversion amount.

This uses the new investors’ price without either note protection.

This uses the discount price even though the cap produces a lower conversion price.

This applies the discount to the cap price, stacking protections that are alternatives.

This pays only the preference and ignores participation.

This is the distribution to the other shareholders.

This calculates participation on all exit proceeds, double-counting the preference amount.

This assumes straight conversion and omits participation after the preference.

This subtracts an investment/pre-money ratio instead of issuing new shares and recomputing the denominator.

This omits the unissued option reserve from post-round fully diluted shares.

This gives the pre-round founder percentage.

This is the percentage held by all pre-round fully diluted holders, not founders alone.

This applies only Series B dilution.

This stops after Series A and ignores Series B.

This adds dilution rates instead of compounding the two rounds.

This subtracts percentage points from founder ownership instead of applying each round to the remaining stake.

This counts both the original and adjusted common-equivalent shares instead of replacing the original conversion amount.

This prices the new investment at the old price and ignores anti-dilution protection.

This is the earlier investor’s ownership, not founders’ ownership.

This ignores the ratchet increase in common-equivalent shares.

This is RVPI, which counts residual value but excludes distributions.

This uses commitments rather than capital actually paid in.

This is DPI, which counts distributions but excludes residual value.

This reports gain relative to paid-in capital, not total value relative to paid-in capital.

This charges carry on returned capital as well as profit.

This includes the LP profit share but omits returned capital.

This is the GP carry distribution, not the LP distribution.

This gives LPs the carry percentage rather than the residual profit percentage.

This is the LP preferred return, not GP carry.

This compounds the hurdle for one fewer year.

This assigns carry on all profit despite the no-catch-up preferred return.

This substitutes simple accrual for the specified annual compounding.

This omits fund expenses.

This applies the initial commitment-based fee throughout the fund life.

This is capital consumed by fees and expenses, not capital left to invest.

This charges each annual fee only once rather than for its full period.

This accrues only one year of the simple preferred return.

This gives the GP 20% of all profit as if there were full catch-up.

This compounds a preferred return explicitly stated to be simple.

This charges carry on capital as well as profit.

This is DPI, which counts distributions but excludes residual value.

This reports gain relative to paid-in capital, not total value relative to paid-in capital.

This is RVPI, which counts residual value but excludes distributions.

This uses commitments rather than capital actually paid in.

This charges carry on returned capital as well as profit.

This is the GP carry distribution, not the LP distribution.

This includes the LP profit share but omits returned capital.

This gives LPs the carry percentage rather than the residual profit percentage.

This reports the total LP holding-period return rather than annual IRR.

This divides the total return by years instead of compounding.

This is the return before carry, not the LP’s net return.

This charges carry on returned capital as well as profit.

This divides the total return by years instead of compounding.

This charges carry on returned capital as well as profit.

This reports the total LP holding-period return rather than annual IRR.

This is the return before carry, not the LP’s net return.

This is total overpaid carry before applying available escrow.

This is all early cash carry paid to the GP, not the amount that must be repaid.

This adds escrow instead of using it to meet the repayment obligation.

This is the escrow balance, not the additional GP cash required.

This compounds a preferred return explicitly stated to be simple.

This accrues only one year of the simple preferred return.

This gives the GP 20% of all profit as if there were full catch-up.

This charges carry on capital as well as profit.

This is preferred profit paid to LPs, not GP catch-up.

This accrues the later contribution for the full initial investment period.

This takes 20% of LP preferred profit rather than solving GP/(LP profit+GP)=20%.

This uses simple rather than compounded preferred returns.

This is all early cash carry paid to the GP, not the amount that must be repaid.

This adds escrow instead of using it to meet the repayment obligation.

This is the escrow balance, not the additional GP cash required.

This is total overpaid carry before applying available escrow.

This applies the catch-up percentage to preferred profit already paid to LPs.

This assumes catch-up fully completes before cash runs out.

This allocates 100% of the catch-up tier to the GP rather than 80%.

This applies the final carry split while the catch-up tier is still incomplete.

This is capital consumed by fees and expenses, not capital left to invest.

This charges each annual fee only once rather than for its full period.

This omits fund expenses.

This applies the initial commitment-based fee throughout the fund life.

This applies the catch-up percentage to preferred profit already paid to LPs.

This allocates 100% of the catch-up tier to the GP rather than 80%.

This assumes catch-up fully completes before cash runs out.

This applies the final carry split while the catch-up tier is still incomplete.

This includes returned capital in the carry base.

This is the catch-up tranche alone, before the final residual split.

This omits the catch-up and pays carry only on profit above the preferred return.

This sizes full catch-up as 20% of preferred profit instead of 20%/80% of it.

This is preferred profit paid to LPs, not GP catch-up.

This accrues the later contribution for the full initial investment period.

This takes 20% of LP preferred profit rather than solving GP/(LP profit+GP)=20%.

This uses simple rather than compounded preferred returns.

This assigns carry on all profit despite the no-catch-up preferred return.

This is the LP preferred return, not GP carry.

This substitutes simple accrual for the specified annual compounding.

This compounds the hurdle for one fewer year.

This sizes full catch-up as 20% of preferred profit instead of 20%/80% of it.

This omits the catch-up and pays carry only on profit above the preferred return.

This is the catch-up tranche alone, before the final residual split.

This includes returned capital in the carry base.

This uses asset beta directly and omits relevering at the target debt/equity ratio.

The equity risk premium is already net of the risk-free rate; subtracting it again understates the premium.

This averages levered peer betas without adjusting for leverage differences and the target capital structure.

This inserts a debt/value weight into a beta relation that requires debt/equity.

This is the payout to other holders, not the preferred investor.

This pays both the full preference and full as-converted share.

This chooses the less valuable option rather than the greater available payout.

This treats nonparticipating preferred as participating preferred.

This assumes the outside commitment is the total round rather than adding the insider’s check.

This applies the ownership percentage to company value rather than solving for the incremental investment.

This is total round proceeds, not the existing investor’s check.

This uses the other holders’ ownership percentage.

This applies the multiple before normalizing the one-time items.

This subtracts the one-time expense again instead of adding it back.

This adds a nonrecurring gain instead of removing it.

This gives enterprise value before the cash-and-debt bridge.

This reverses B minus A.

This compares undiscounted cash totals.

This reports Project B’s standalone NPV rather than its incremental NPV over A.

This values incremental inflows but omits the larger initial investment.

This pays Series A in full although insufficient cash remains after the senior claim.

This uses a pro-rata split even though the claims have different seniority.

This is the senior Series B claim, not Series A’s payout.

This is the residual for common holders after preferences.

This ignores interest earned on earlier deposits.

This uses the annual rate as the monthly rate.

This assumes beginning-of-month deposits rather than the stated month-end deposits.

This uses a present-value annuity factor for a future accumulation target.

This applies the permanent-debt tax-shield shortcut to debt that ends at maturity.

This sums tax shields without discounting them.

This omits the financing fee.

Debt proceeds are financing, not an additional increment to project value.

This charges interest on the original principal in every year rather than the declining beginning-of-year balance.

This omits the internal funding already available.

This sizes debt from Year 1 alone and ignores the more restrictive later year.

This is maximum debt capacity, not the residual equity need.

This uses book equity rather than market-value capital weights.

This uses equal capital weights despite unequal market values.

This omits the usable interest tax shield.

This applies the tax shield to equity as well as debt.

This omits B, the old-price equivalent of new consideration.

This reverses the numerator and denominator.

This applies full-ratchet protection instead of weighted-average protection.

This double-counts B in the denominator.

This includes noncash depreciation in a cash break-even calculation.

This charges a historical equipment purchase against the current month’s operating cash break-even.

This divides fixed costs by variable cost instead of contribution per customer.

This ignores variable delivery and support costs.

This omits the financing fee.

This applies the permanent-debt tax-shield shortcut to debt that ends at maturity.

This sums tax shields without discounting them.

Debt proceeds are financing, not an additional increment to project value.

This charges interest on the original principal in every year rather than the declining beginning-of-year balance.

This omits the internal funding already available.

This is maximum debt capacity, not the residual equity need.

This sizes debt from Year 1 alone and ignores the more restrictive later year.

This fails to divide acquisition spending by the number of customers acquired.

This treats the cost-of-revenue percentage as gross margin.

This uses revenue rather than gross profit as the monthly recovery of acquisition cost.

The revenue input is already monthly. Multiplying the answer by 12 confuses months and years.

This fails to add back noncash stock compensation included in net income.

This omits cash collected before revenue recognition, reflected in the deferred-revenue increase.

This deducts equipment purchases from operating cash flow; they are investing cash flows.

This adds an increase in receivables instead of subtracting it.

This applies the tax shield to equity as well as debt.

This omits the usable interest tax shield.

This uses book equity rather than market-value capital weights.

This uses equal capital weights despite unequal market values.

This ignores the time value and systematic risk of the future expected payoff.

This adds the failure probability to the discount rate even though failure is already included in expected cash flow.

This is the PV of expected proceeds before the initial cost.

This discounts only the success payoff and ignores the stated failure probability.

This inserts a debt/value weight into a beta relation that requires debt/equity.

This uses asset beta directly and omits relevering at the target debt/equity ratio.

The equity risk premium is already net of the risk-free rate; subtracting it again understates the premium.

This averages levered peer betas without adjusting for leverage differences and the target capital structure.

This prices the new investment at the old price and ignores anti-dilution protection.

This ignores the ratchet increase in common-equivalent shares.

This counts both the original and adjusted common-equivalent shares instead of replacing the original conversion amount.

This is the earlier investor’s ownership, not founders’ ownership.