Financial Management C214 MBA Questions With
All Correct Answers
How can a private firm appropriately maximize shareholder value? correct
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? correct answer -Because american investors are focused on
international investing in a global marketplace.
What is one of the two basic types of financial instruments? correct answer
-Bonds.
If a company outsources the manufacturing of its products to a foreign
country, what are the likeliest outcomes? correct answer -Consumer
prices will decrease and domestic employment will decrease.
What is true about the content and structure of a balance sheet? correct
answer -It reports the assets, liabilities, and equity at a point in time.
A company reported an increase in accounts receivable of $5000 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? correct answer -The change will decrease
cash flows from operations by $5000
Which statement accurately explains the recognitions of revenues and
expenses under accounting income and income for tax purposes? correct
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 a firms cash flow from investments, using the data below and
assuming no asset disposals?
-change in PP&E $5000
-depreciation expense $300 correct answer -Putting these two only
together. $5300 outflow
, What is the basic equation for a balance sheet? correct answer -
Assets=liabilities + equity
What do cash flows from investing activities generally relate to? correct
answer -A firm's purchase and sale of long-term assets.
Which transaction is reflected in cash flow from operating activities? correct
answer -Cash sales to customers.
What does free cash flow represent? correct answer -Cash available for
distribution after funding required reinvestment.
I'm comparing the ratios of two firms, looking to address timing differences,
what would be considered an example of a timing difference between the two
firms? correct answer -The firms have different physical years.
What is fixed asset turnover rate?
Sales / fixed assets. Ex: sales 4000 fixed assets 1000 correct answer -The
fixed asset turnover rate would be 4.0
A firm has a ROE (return on equity) of .27 and the industry average ROE is .24.
What conclusion can an analyst draw? correct answer -The firm in
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? correct answer -The
product must have been delivered.
A teacher invest $100,000, for 5 years at an interest rate of 4% compounded
annually. How much will they have at the end of 5 years? correct answer -
Long math. 1 year 104,000. 2 year 108,160 3 year 114,486 4 year 118,985 5
year etc. compound yearly and add to last compound =
$121,665
An accountant is 40, retiring at 70 =30 years. Going to save 6,000 per year and
will earn 4% annually. correct answer -$336,510
All Correct Answers
How can a private firm appropriately maximize shareholder value? correct
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? correct answer -Because american investors are focused on
international investing in a global marketplace.
What is one of the two basic types of financial instruments? correct answer
-Bonds.
If a company outsources the manufacturing of its products to a foreign
country, what are the likeliest outcomes? correct answer -Consumer
prices will decrease and domestic employment will decrease.
What is true about the content and structure of a balance sheet? correct
answer -It reports the assets, liabilities, and equity at a point in time.
A company reported an increase in accounts receivable of $5000 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? correct answer -The change will decrease
cash flows from operations by $5000
Which statement accurately explains the recognitions of revenues and
expenses under accounting income and income for tax purposes? correct
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 a firms cash flow from investments, using the data below and
assuming no asset disposals?
-change in PP&E $5000
-depreciation expense $300 correct answer -Putting these two only
together. $5300 outflow
, What is the basic equation for a balance sheet? correct answer -
Assets=liabilities + equity
What do cash flows from investing activities generally relate to? correct
answer -A firm's purchase and sale of long-term assets.
Which transaction is reflected in cash flow from operating activities? correct
answer -Cash sales to customers.
What does free cash flow represent? correct answer -Cash available for
distribution after funding required reinvestment.
I'm comparing the ratios of two firms, looking to address timing differences,
what would be considered an example of a timing difference between the two
firms? correct answer -The firms have different physical years.
What is fixed asset turnover rate?
Sales / fixed assets. Ex: sales 4000 fixed assets 1000 correct answer -The
fixed asset turnover rate would be 4.0
A firm has a ROE (return on equity) of .27 and the industry average ROE is .24.
What conclusion can an analyst draw? correct answer -The firm in
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? correct answer -The
product must have been delivered.
A teacher invest $100,000, for 5 years at an interest rate of 4% compounded
annually. How much will they have at the end of 5 years? correct answer -
Long math. 1 year 104,000. 2 year 108,160 3 year 114,486 4 year 118,985 5
year etc. compound yearly and add to last compound =
$121,665
An accountant is 40, retiring at 70 =30 years. Going to save 6,000 per year and
will earn 4% annually. correct answer -$336,510
