WGU - C214 Financial Management –
Final Exam Questions with Complete
Solutions
Statement of Cash Flows Correct Answers Shows the change in cash
balance for a period of time. Focuses only on items where cash is received, or cash
is paid.
Cash Flow from Operating Activities (CFO)Correct Answers Cash flow that a
company generates as a result of day-to-day business operations. Deals with
Current Assets and Current Liabilities.
Cash Flow from Investing Activities (CFI)Correct Answers Cash flow that is
generated from investments in long term assets.
Cash Flow from Financing Activities (CFF)Correct Answers Cash flow that is
used to fund the company. Cash flow that is generated from financing the
business. Includes Debt & Equity.
How does an increase in Accounts receivable impact CFO?Correct Answers
An Increase in Accounts receivable will decrease CFO
How does an increase in Accounts payable impact CFO?Correct Answers
An Increase in Accounts Payable will increase CFO
, What financial statement is prepared at a point in timeCorrect Answers
Balance Sheet
What financial statements are prepared for a period of time?Correct
Answers · Income Statement
· Retained Earnings Statement
· Statement of Cash Flows
Define Efficient Frontier Correct Answers Maximizes expected return for a
given level of risk
Where would a risk adverse investor fall on the efficient frontier? Correct
Answers 100% Bonds
Where would a risk-taking investor fall on the efficient frontier? Correct
Answers 100% Stocks
What is a Beta? Correct Answers A Measure of Risk - A Beta 1 is the
average risk of all stocks. Anytime a beta is below 1, it is less risk. If it is more than
1, it is high risk.
Define efficient market hypothesis as it relates to a firm? Correct Answers
For any company to survive, they need to make profitable decisions. Otherwise,
Final Exam Questions with Complete
Solutions
Statement of Cash Flows Correct Answers Shows the change in cash
balance for a period of time. Focuses only on items where cash is received, or cash
is paid.
Cash Flow from Operating Activities (CFO)Correct Answers Cash flow that a
company generates as a result of day-to-day business operations. Deals with
Current Assets and Current Liabilities.
Cash Flow from Investing Activities (CFI)Correct Answers Cash flow that is
generated from investments in long term assets.
Cash Flow from Financing Activities (CFF)Correct Answers Cash flow that is
used to fund the company. Cash flow that is generated from financing the
business. Includes Debt & Equity.
How does an increase in Accounts receivable impact CFO?Correct Answers
An Increase in Accounts receivable will decrease CFO
How does an increase in Accounts payable impact CFO?Correct Answers
An Increase in Accounts Payable will increase CFO
, What financial statement is prepared at a point in timeCorrect Answers
Balance Sheet
What financial statements are prepared for a period of time?Correct
Answers · Income Statement
· Retained Earnings Statement
· Statement of Cash Flows
Define Efficient Frontier Correct Answers Maximizes expected return for a
given level of risk
Where would a risk adverse investor fall on the efficient frontier? Correct
Answers 100% Bonds
Where would a risk-taking investor fall on the efficient frontier? Correct
Answers 100% Stocks
What is a Beta? Correct Answers A Measure of Risk - A Beta 1 is the
average risk of all stocks. Anytime a beta is below 1, it is less risk. If it is more than
1, it is high risk.
Define efficient market hypothesis as it relates to a firm? Correct Answers
For any company to survive, they need to make profitable decisions. Otherwise,
