Download MBA Math for Executive MBA Program MBA Math is an online

MBA Math for Executive MBA Program
MBA Math is an online training tool which prepares you for your MBA classes with an overview of Excel,
Finance, Economics, Statistics and Accounting. Each section has a pre\post quiz, overview lectures and drill
exercises to test your knowledge of the material covered. Success in your upcoming courses will depend on
completing sections which you are unfamiliar with prior to you beginning your MBA program. The professors
for each course will assume you have mastered this introduction material so they will not review this.
The following sections are highly recommended for your upcoming courses. The other sections are valuable as
well, but if you only have time to complete certain sections, these are the critical ones.
Analytical Tools for Decision Making
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Excel (51 minute lecture in 2 parts, 10 Post-Quiz questions)
Statistics – Basic Statistics (8 minute lecture, 11 Post-Quiz questions)
Statistics – Probability (6 minute lecture, 7 Post-Quiz questions)
Statistics – Normal Distribution (14 minute lecture, 7 Post-Quiz questions)
Statistics – Sampling (20 minute lecture, 6 Post-Quiz questions)
Financial and Managerial Accounting
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Finance – NPV (5 minute lecture, 3 Post-Quiz questions)
Accounting – Balance I (9 minute lecture, 6 Post-Quiz questions)
Accounting – Balance II (12 minute lecture, 6 Post-Quiz questions)
Accounting – Income Statement (10 minute lecture, 5 Post-Quiz questions)
Accounting – Cash Flow (16 minute lecture, 9 Post-Quiz questions)
Accounting – Connections (9 minute lecture, 4 Post-Quiz questions)
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Finance – TVM Annual (10 minute lecture, 4 Post-Quiz questions)
Finance – Ann/Perp Constant (11 minute lecture, 4 Post-Quiz questions)
Finance – Ann/Perp Constant (11 minute lecture, 4 Post-Quiz questions)
Finance
Micro and Macro Economics
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Economics – Marginal Analysis I (15 minute lecture, 3 Post-Quiz questions)
Economics – Supply and Demand (10 minute lecture, 2 Post-Quiz questions)
Appendices A and B of this document contain Overviews and Sample Problems for some of these key sections.
Appendix A - Analytical Tools for Decision Making – Section Overview and Sample Problems
1) Excel
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Use Excel to design worksheets using simple formulas
Sample Question:
Design a spreadsheet to compute the dollar amount in each of the next 10 years of an initial investment
returning a constant annual interest rate. Interest is reinvested each year so that the amount returning
interest grows.
What is the dollar amount 9 years from now of $100 invested at 10% annual interest? Please round your
answer to the nearest cent.
2) Basic Stats
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Understand the descriptive statistics concepts of mean, median, mode, variance, and standard
deviation
Manually compute these measures from their definitions for custom data sets
Compute descriptive statistics for custom data sets in Excel using basic functions and named statistical
functions
Sample Question:
Unit sales for new product ABC have varied in the first seven months of this year as follows:
Month
Jan Feb Mar Apr May Jun Jul
Unit Sales 385 419 227 193 283 137 419
What is the (population) variance of the data?
Please specify your answer as an integer. Note that the correct answer will be evaluated based
on the full-precision result you would obtain using Excel
3) Probability
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Understand how to create a graphical histogram and probability density function from a data set
Manually compute mean, variance, and standard deviation from probability table summaries of data
sets
Compute descriptive statistics from probability table summaries in Excel using basic functions and the
built-in SUMPRODUCT function
Sample Question:
Let X be a discrete random variable. If Pr(X<8) = 2/6, and Pr(X<=8) = 6/12, then what is Pr(X=8)?
Please specify your answer in decimal terms and round your answer to the nearest hundredth (e.g., enter
12 percent as 0.12).
4) Normal distribution
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Understand how to solve problems represented by the uniform distribution
Understand the relationship between the “standard” normal distribution and other normal
distributions
Convert any nonstandard normal distribution into its equivalent standard normal distribution for
purposes of answering various questions
Use reference tables to retrieve answers to questions about the standard normal distribution
Use Excel to create formulas with built-in shortcut functions for the normal distribution
Sample Question:
The sales department has determined that the average purchase value for their catalog business is
normally distributed with a mean of $30.55 and a standard deviation of $9.43.
What is the purchase value at the 20th percentile?
Please round your answer to the nearest cent.
5) Sampling
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Distinguish population vs. sample, parameter vs. statistic, and description vs. inference
Compute sample mean, variance, and standard deviation
Understand the rationale for the distribution of sample means
Compute mean, variance, and standard deviation for the distribution of sample means using the
sample data
Compute mean, variance, and standard deviation for the distribution of sample means using
population parameters and the Central Limit Theorem
Use Excel to solve sampling problems
Sample Question:
Suppose your marketing colleague used a known population mean and standard deviation to compute the
standard error as 62.3 for samples of a particular size. You don't know the particular sample size but your
colleague told you that the sample size is greater than 90. Your boss asks what the standard error would
be if you triple the sample size.
What is the standard error for the new sample size?
Please round your answer to the nearest tenth. Note that the correct answer will be evaluated based
on the full-precision result you would obtain using Excel.
Appendix B Financial Accounting – Section Overview and Sample Problems
1) NPV (Under the Finance Section)
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Understand the assumptions about discount rates embedded in the NPV formula
Translate word problems into clearly defined sets of cash flows
Clarify the known and unknown quantities
Determine the appropriate concepts and equations to structure the cash flows
Use Excel to lay out a cash flow model and compute NPV for various alternatives
Perform a sense check of whether the results are reasonable
Sample Question:
A firm that purchases electricity from the local utility is considering installing a steam generator. A large
generator costs $330,000 whereas a small generator costs $220,000. The cost of operating the generator
would be $150,000 per year for the large and $180,000 for the small. Either generator will last for five
years. The cost of capital is 10%.
For each generator option, assume immediate installation, with purchase and operating costs in the
current year and operating costs continuing for the next four years. Assume payments under both options
at the start of each year (i.e., immediate, one year from now,..., four years from now).
What is the net present value of the more attractive generator?
Please round your answer to the nearest dollar. Report the NPV of cost as a negative number.
2) Balance I
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Understand the definition of assets, liabilities, and equity
Understand why assets are uses of funds
Understand why liabilities and equity are sources of funds
Understand the balance sheet equation that states assets must equal liabilities plus equity
Compute missing values from logical relationships among balance sheet categories
Use the balance sheet equation to evaluate common business transactions
Sample Question:
Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity.
1. Buy $15,000 worth of manufacturing supplies on credit
2. Issue $85,000 in stock
What is the net change in Total Liabilities?
3) Balance II
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Work with the asset types cash, accounts receivable, inventory, and property, plant & equipment
Work with the liability types accounts payable and debt
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Work with the equity types paid-in capital and retained earnings
Understand that balance sheet amounts reflect historical cost rather than market value
Identify the appropriate balance sheet adjustments for common business transactions
Sample Question:
The balance sheet value of a firm's inventory is $50,000. Suppose that the firm purchases supplies at a cost
of $4,000 and adds them to inventory. Shortly thereafter, the market value of the recently purchased
supplies changes to $3,500.
Assuming no other changes to inventory, and using the historical cost method, what is the final balance
sheet value of inventory?
4) Income
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Understand the expense types cost of goods sold (COGS) and sales, general, and administration
(SG&A), depreciation, and income taxes
Recognize that net income and profit are synonyms but differ from cash flow
Understand the difference between cash payments and depreciation expense for investments in longterm property, plant, and equipment
Sample Question:
Suppose Dansko Integrated has the following revenue and expenses for 2010:
Revenues of $8,500,000
Cost of Goods Sold of $2,550,000
Depreciation Expenses of $800,000
Income Taxes of $1,144,000
Interest Expenses of $90,000
Other Expenses of $500,000
Sales, General, & Administrative Expenses of $1,700,000
Create an income statement with amounts in thousands
What is the value of Profit?
Please specify your answer in the same units as the financial statement.
5) Cash Flow
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Understand the operating adjustment for non-cash depreciation expenses
Understand the operating adjustments for changes in asset categories such as accounts receivable and
inventory
Understand the operating adjustments for changes in liability categories such as accounts payable
Understand the investing adjustments for changes in the asset category property, plant, and
equipment
Understand the financing adjustments for changes in debt and dividends
Sample Question:
Suppose Torche Corporation has the following results related to cash flows for 2010:
Net Income of $10,000,000
Increase in Accounts Payable of $800,000
Increase in Accounts Receivable of $600,000
Decrease in Inventory of $100,000
Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with
amounts in thousands.
What is the Net Cash Flow from Operating Activities?
Please specify your answer in the same units as the financial statement.
6) Connections
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Use a balance sheet, income statement, and changes in balance sheet categories to create an updated
balance sheet
Use an income statement and changes in balance sheet categories to compute the change in cash flow
Use a balance sheet and statement of cash flows to compute an updated balance sheet
Use a balance sheet and information about revenues and expenses to compute profit
Sample Question:
Use the starting balance sheet, income statement, and the list of changes to answer the question.
Nippon Technology
Balance Sheet
As of December 31, 2010
(amounts in thousands)
Cash
37,000 Liabilities
Other Assets 39,000 Equity
24,000
52,000
Total Assets 76,000 Total Liabilities & Equity 76,000
Nippon Technology
Income Statement
January 1 to March 31, 2011
(amounts in thousands)
Revenue
5,800
Expenses
3,400
Net Income
2,400
Between January 1 and March 31, 2011:
1. Other Assets increase by $300,000
2. Liabilities decrease by $200,000
3. Paid-In Capital does not change
3. Dividends increases by $100,000
What is the value for Cash on March 31, 2011?
Please specify your answer in the same units as the financial statements.