Test WGU C214 Finance Management
PVCC
Financial Management (Western Governors University)
,4/10/22, 9:16 Test: WGU C214 Finance Management PVCC
AM
Name: Score:
65 Multiple choice questions
Term
1 of 65
Which financial ratio is used to measure a company effectiveness in extending credit as well
as collecting debts?
AR
turnover
Prospectus
Working
capital
Municipal bonds
Term
2 of 65
Why does a long-term bond resemble an interest-only loan?
It reports the assets, liabilities, and equity at a point in time
Debt financing provides interest tax benefits
None of the principle is repaid until the bond matures
When market interest rates fluctuate, the bond coupon rate is unchanged
Term 3 of 65
Company Y has a greater degree of financial risk than Company Z.
What will happen if there is a 1% decrease in EBT for both companies?
It will result in a greater percentage in Company Y's per-tax profit
The firm is generating higher returns to owners than the industry
Net Sales / Average Net Fixed Assets Sales @ 4000 / Fixed Assets @ 1000= 4.0
It reports the assets, liabilities, and equity at a point in time
1/
23
, 4/10/22, 9:16 Test: WGU C214 Finance Management PVCC |
AM
4 of
Term 65
A company issues bonds at a market price of $925. The face value is $1000. The bond matures
in 10 years, and the coupon rate is 6% compounded semiannually.
What is the yield to maturity (YTM) on the company's bonds?
$1.2 million
$23, 015
7.06%
$1000
Term
5 of 65
Company A has a degree of operating leverage of 1.85 and Company B has a degree of
operating leverage of 6.5.
What does the degree of operating leverage say about the two companies?
Company A must have a lower increase in sales than Company B to achieve the same operating income
Net Sales / Average Net Fixed Assets Sales @ 4000 / Fixed Assets @ 1000= 4.0
The firm is generating higher returns to owners than the industry
CAPM considers risk of a stock relative to the market to determine expected returns
Term
6 of 65
What does free cash flow represent?
None of the principle is repaid until the bond matures
Cash available for distribution after funding required reinvestment
CAPM considers risk of a stock relative to the market to determine expected returns
It reports the assets, liabilities, and equity at a point in time
2/
23
PVCC
Financial Management (Western Governors University)
,4/10/22, 9:16 Test: WGU C214 Finance Management PVCC
AM
Name: Score:
65 Multiple choice questions
Term
1 of 65
Which financial ratio is used to measure a company effectiveness in extending credit as well
as collecting debts?
AR
turnover
Prospectus
Working
capital
Municipal bonds
Term
2 of 65
Why does a long-term bond resemble an interest-only loan?
It reports the assets, liabilities, and equity at a point in time
Debt financing provides interest tax benefits
None of the principle is repaid until the bond matures
When market interest rates fluctuate, the bond coupon rate is unchanged
Term 3 of 65
Company Y has a greater degree of financial risk than Company Z.
What will happen if there is a 1% decrease in EBT for both companies?
It will result in a greater percentage in Company Y's per-tax profit
The firm is generating higher returns to owners than the industry
Net Sales / Average Net Fixed Assets Sales @ 4000 / Fixed Assets @ 1000= 4.0
It reports the assets, liabilities, and equity at a point in time
1/
23
, 4/10/22, 9:16 Test: WGU C214 Finance Management PVCC |
AM
4 of
Term 65
A company issues bonds at a market price of $925. The face value is $1000. The bond matures
in 10 years, and the coupon rate is 6% compounded semiannually.
What is the yield to maturity (YTM) on the company's bonds?
$1.2 million
$23, 015
7.06%
$1000
Term
5 of 65
Company A has a degree of operating leverage of 1.85 and Company B has a degree of
operating leverage of 6.5.
What does the degree of operating leverage say about the two companies?
Company A must have a lower increase in sales than Company B to achieve the same operating income
Net Sales / Average Net Fixed Assets Sales @ 4000 / Fixed Assets @ 1000= 4.0
The firm is generating higher returns to owners than the industry
CAPM considers risk of a stock relative to the market to determine expected returns
Term
6 of 65
What does free cash flow represent?
None of the principle is repaid until the bond matures
Cash available for distribution after funding required reinvestment
CAPM considers risk of a stock relative to the market to determine expected returns
It reports the assets, liabilities, and equity at a point in time
2/
23
