D076 OA Questions and Answers
What does the term legal describe? An action that is in accordance with the laws and rules
set by an authority.
Encourage manipulation of accounting procedures to
optimize the company's profit
Release managers who do not attempt to maximize
immediate shareholder value Set strict covenants
that the company cannot uphold if it chooses a risky
project An action that is in accordance with the
laws and rules set by an authority.
What does high inventory turnover relative to the The firm does not hold enough inventory and
industry and competitors indicate? is making its customers wait longer to
receive their purchased goods.
Models are required by the SEC when a firm plans to
issue additional stock on the public market.
The firm holds too much inventory and its successful
selling its good and services. Models allow users to
see the complex relationships between sales and
other aspects of the business.
The firm does not hold enough inventory and is making
its customers wait longer to receive their purchased
goods.
,What is the ratio that tells you on Average collection period
average how long it takes for
a firm to collect accounts
receivable.
Average
Benchmarking
Opportunity cost
Average collection
period Leading
indicator
Three different names are used Discount rate, required rate, and cost of capital.
for interest rate for different
purposes and perspectives:
Discount rate, required rate, and
cost of capital.
Required rate, correlated indicator,
opportunity cost
Cost of capital, interest rate, and
renew rate required rate, discount
method, cost of interest
What is the main purpose of It allows borrowers to pay to use the assets of another entity to
charging interest? accomplish their own goals.
interest can be a good tool
because it summarizes the
required return, but it is a
detriment because it requires a
larger cost of capital.
The higher risk an investor takes, the
higher return the investor expects
to receive.
Compounding interest can be a
good tool to understand the time
value of money, but it is a
detriment because it does not
take inflation into account.
It allows borrowers to pay to use
the assets of another entity to
accomplish their own goals.
The required rate of return is also Hurdle rate
known as the BLANK in the
context of corporate finance.
Inflation
Hurdle
, rate
Opportunity
cost Risk
The BLANK is the rate of return Required rate of return
or compensation that an
investor or lender will accept for
investments such as stocks,
bonds, or loans.
Hurdle rate
Inflation
Opportunity
cost
Required rate of return
What does the term legal describe? An action that is in accordance with the laws and rules
set by an authority.
Encourage manipulation of accounting procedures to
optimize the company's profit
Release managers who do not attempt to maximize
immediate shareholder value Set strict covenants
that the company cannot uphold if it chooses a risky
project An action that is in accordance with the
laws and rules set by an authority.
What does high inventory turnover relative to the The firm does not hold enough inventory and
industry and competitors indicate? is making its customers wait longer to
receive their purchased goods.
Models are required by the SEC when a firm plans to
issue additional stock on the public market.
The firm holds too much inventory and its successful
selling its good and services. Models allow users to
see the complex relationships between sales and
other aspects of the business.
The firm does not hold enough inventory and is making
its customers wait longer to receive their purchased
goods.
,What is the ratio that tells you on Average collection period
average how long it takes for
a firm to collect accounts
receivable.
Average
Benchmarking
Opportunity cost
Average collection
period Leading
indicator
Three different names are used Discount rate, required rate, and cost of capital.
for interest rate for different
purposes and perspectives:
Discount rate, required rate, and
cost of capital.
Required rate, correlated indicator,
opportunity cost
Cost of capital, interest rate, and
renew rate required rate, discount
method, cost of interest
What is the main purpose of It allows borrowers to pay to use the assets of another entity to
charging interest? accomplish their own goals.
interest can be a good tool
because it summarizes the
required return, but it is a
detriment because it requires a
larger cost of capital.
The higher risk an investor takes, the
higher return the investor expects
to receive.
Compounding interest can be a
good tool to understand the time
value of money, but it is a
detriment because it does not
take inflation into account.
It allows borrowers to pay to use
the assets of another entity to
accomplish their own goals.
The required rate of return is also Hurdle rate
known as the BLANK in the
context of corporate finance.
Inflation
Hurdle
, rate
Opportunity
cost Risk
The BLANK is the rate of return Required rate of return
or compensation that an
investor or lender will accept for
investments such as stocks,
bonds, or loans.
Hurdle rate
Inflation
Opportunity
cost
Required rate of return
