WGU C214 Finance Management Exam All Possible Questions and Answers with complete solution

How can a private firm appropriately maximize shareholder value? - Answer-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? - AnswerBecause international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? - Answer-Bonds Which two effects does the unbundling and offshoring of production have on employment when the global value chain is taken into consideration? - Answer-Unbundling and offshoring allows firms to offer intermediate and final goods at lower prices, thus increasing employment. Unbundling and offshoring decreases costs, which results in expansion of sales and higher employment What is true about the content and structure of a balance sheet? - Answer-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? - Answer-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? - Answer-Revenues and expenses may be recognized in one period for accounting income purposes and in a different period for income tax purposes. What is the basic equation for a balance sheet? - Answer-Assets=liabilities+equity What do cash flows from investing activities generally relate to? - Answer-A firm's purchase and sale of long-term assetsWhich transaction is reflected in cash flow from operating activities? - Answer-Cash sales to customers What does free cash flow represent? - Answer-Cash available for distribution after funding required reinvestment An analyst is comparing the ratios of two different firms and needs to address timing differences. What would be considered an example of a timing difference between the two firms? - Answer-The firms have different fiscal years A companys year end balance sheet for 2013: AR: 900 Inventory: 1200 Fixed assets: 1000 AP: 1300 Sales: 4000 Salaries: 275 What is their fixed asset turnover ratio? - Answer-4.0