WGU C214 Pre-Assement 2023 with complete solution
How can a private firm appropriately maximize shareholder value?
By making decisions that keep the control of the business with the owners
Why are American regulators focused on international investing in a global
marketplace?
Because international investing in a global marketplace is the concern of
American investors
What is one of the two basic types of financial instruments?
Bonds
If a company outsources the manufacturing of its products to a foreign country,
what are the likeliest
outcomes?
Consumer prices will decrease and Domestic employment will decrease.
What is true about the content and structure of a balance sheet?
It reports the assets, liabilities, and equity at a point in time.
A company reported an increase in accounts receivable of $5,000 during the
recent period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the
operating activities section?
The change will decrease cash flows from operations by $5,000.
Which statement accurately explains the recognition of revenues and expenses
under accounting income
and income for tax purposes?
Revenues and expenses may be recognized in one period for accounting income
purposes and in a different period for income tax purposes.
Selected Data for 20x2 for ABD Inc.
Netincome $ 1,000
Depreciation expense $ 300
Change in operating assets $ 600
Change in net property, plant, and equipment$ 5,000
Changes in long-term liabilities $ 1,000
Dividends paid $ 200
What is the firm's cash flow from investments, using the data above and
assuming no asset disposals?
$5,300 outflow
What is the basic equation for a balance sheet?
Assets = Liabilities + Equity
What do cash flows from investing activities generally relate to?
A firm's purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities?
Cash sales to customers
What does free cash flow represent?
, Cash available for distribution after funding required reinvestment
An analyst is comparing the ratios of two firms and needs to address timing
differences. What would be considered an example of a timing difference between
the two firms?
The firms have different fiscal years.
A company's year-end balance sheetfor 2013 shows the following:
Accounts receivable: $900
Inventory: $1200
Fixed assets: $1000
Accounts payable: $1300
Sales: $4000
Salaries expense: $275
What is their fixed asset turnover ratio?
4.0
A firm has a ROE (return on equity) of 0.27 and the industry average ROE is 0.24.
Which conclusion would an analyst draw when comparing the firm to the
industry?
The firm is generating higher returns to owners than the industry.
What must have taken place for a firm to recognize revenue, in order for the firm
to comply with the accrual accounting rules?
The product must have been delivered.
A teacher won $100,000 and invests this money for 5 years at an interest rate of
4% (compounded
annually).
How much will the teacher have in principal and interest at the end of the 5
years?
$121,665
An accountantis 40 years old with an anticipated retirement age of 70 years old.
The accountant plans to
save $6,000 per year at the end of the next 30 years to fund retirement.
$336,510
An investor deposits $2,000 per year (beginning today) for 10 years in a 4%
interest bearing account. The
last cash flow is received 1 year prior to the end ofthe tenth year.
What is the investor's future balance after 10 years?
$24,973
What is the par value (face value) of a bond?
The sum of money that the corporation promises to pay upon expiration of the bond.
A broker is considering purchasing common stock in a company that has
average but consistent operating
performance.
Which factor should lead the broker to purchase shares in this company?
The current price of the stock is 25% below its intrinsic value.
How can a private firm appropriately maximize shareholder value?
By making decisions that keep the control of the business with the owners
Why are American regulators focused on international investing in a global
marketplace?
Because international investing in a global marketplace is the concern of
American investors
What is one of the two basic types of financial instruments?
Bonds
If a company outsources the manufacturing of its products to a foreign country,
what are the likeliest
outcomes?
Consumer prices will decrease and Domestic employment will decrease.
What is true about the content and structure of a balance sheet?
It reports the assets, liabilities, and equity at a point in time.
A company reported an increase in accounts receivable of $5,000 during the
recent period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the
operating activities section?
The change will decrease cash flows from operations by $5,000.
Which statement accurately explains the recognition of revenues and expenses
under accounting income
and income for tax purposes?
Revenues and expenses may be recognized in one period for accounting income
purposes and in a different period for income tax purposes.
Selected Data for 20x2 for ABD Inc.
Netincome $ 1,000
Depreciation expense $ 300
Change in operating assets $ 600
Change in net property, plant, and equipment$ 5,000
Changes in long-term liabilities $ 1,000
Dividends paid $ 200
What is the firm's cash flow from investments, using the data above and
assuming no asset disposals?
$5,300 outflow
What is the basic equation for a balance sheet?
Assets = Liabilities + Equity
What do cash flows from investing activities generally relate to?
A firm's purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities?
Cash sales to customers
What does free cash flow represent?
, Cash available for distribution after funding required reinvestment
An analyst is comparing the ratios of two firms and needs to address timing
differences. What would be considered an example of a timing difference between
the two firms?
The firms have different fiscal years.
A company's year-end balance sheetfor 2013 shows the following:
Accounts receivable: $900
Inventory: $1200
Fixed assets: $1000
Accounts payable: $1300
Sales: $4000
Salaries expense: $275
What is their fixed asset turnover ratio?
4.0
A firm has a ROE (return on equity) of 0.27 and the industry average ROE is 0.24.
Which conclusion would an analyst draw when comparing the firm to the
industry?
The firm is generating higher returns to owners than the industry.
What must have taken place for a firm to recognize revenue, in order for the firm
to comply with the accrual accounting rules?
The product must have been delivered.
A teacher won $100,000 and invests this money for 5 years at an interest rate of
4% (compounded
annually).
How much will the teacher have in principal and interest at the end of the 5
years?
$121,665
An accountantis 40 years old with an anticipated retirement age of 70 years old.
The accountant plans to
save $6,000 per year at the end of the next 30 years to fund retirement.
$336,510
An investor deposits $2,000 per year (beginning today) for 10 years in a 4%
interest bearing account. The
last cash flow is received 1 year prior to the end ofthe tenth year.
What is the investor's future balance after 10 years?
$24,973
What is the par value (face value) of a bond?
The sum of money that the corporation promises to pay upon expiration of the bond.
A broker is considering purchasing common stock in a company that has
average but consistent operating
performance.
Which factor should lead the broker to purchase shares in this company?
The current price of the stock is 25% below its intrinsic value.
