WGU 214. FINANCIAL MANAGEMENT PVCC. Pre-
Assessment,100% APPROVED CORRECT
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 American investors are focused on international investing in a global marketplace
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?
Choose 2 answers
Consumer prices will decrease. 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.
Net income $ 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 sheet for 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
Assessment,100% APPROVED CORRECT
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 American investors are focused on international investing in a global marketplace
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?
Choose 2 answers
Consumer prices will decrease. 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.
Net income $ 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 sheet for 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
