WGU C214 OA Financial Management Retake
Exam Latest Questions and Answers ()
(Verified Answers)
1. What does the Foreign Corrupt Practices Act forbid U.S. companies to
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do?
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Prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals.
ji ji ji ji ji ji ji ji ji ji ji ji ji ji
2. What are two basic types of financial instruments?
j i j i j i ji j i ji j i
Stocks and Bonds ji ji
3. What are secondary markets? j i j i j i
Secondaryfinancialmarketsare wheresecurities aretraded afterthe initial offering.
ji ji ji ji ji ji ji ji ji ji ji
4. What do cash flows from operating activities report?
j i ji ji ji ji j i j i
Operating – day to day operations ji ji ji ji ji
Investing–Property,plant,equipment,longtermitems
ji ji ji ji ji ji ji
Financing – debt and equity changes
ji ji ji ji ji ji
5. What does the statement of cash flows report?
j i ji j i j i ji j i j i
Cashinflowandcashoutflowofbusinessforperiodoftime
ji ji ji ji ji ji ji ji ji ji
6. Write the equation that links the income statement to the balance sheet?
ji j i j i j i ji j i j i j i ji ji ji
New Re= Old RE + Net Income – dividends
ji ji ji ji ji ji ji ji
7.
Net income
ji 2,000
Depreciation 500
Changeinoperatingassets ji ji ji 400
ChangeinPPE ji ji 1,000
Changeonlongtermliabilities
ji ji ji ji 600
,Dividends paid ji 100
What is the firm’s cash flow from financing activities? CFF
ji ji ji ji j i ji ji ji ji
Increase in debt 600 + (no change in stock) 0 – (dividends paid) 100 = 500
j i j i j i j i j i j i j i j i j i j i j i j i j i j i j i
8. Describe an income statement? j i j i j i
Anincomestatement is a financial statement thatshows you how profitable your business was over a given
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
reporting period. It shows your revenue, minus your expenses and losses
ji ji ji ji ji ji ji ji ji ji ji
, 9. What item is included in the income statement and not included in the
ji j i ji j i ji ji ji j i ji ji j i ji
statement of cash flows.
ji j i ji j i
Depreciation
10. A company sold goods in 2016 for $30,000 and collected the cash in 2017. In 2016, the
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
company incurred and paid $20,000 in expenses related to the goods sold. How
ji ji j i ji ji j i ji j i j i ji ji ji ji
much income should the company report in 2016 under the accrual basis of accounting?
ji ji ji ji ji ji ji ji ji ji ji ji j i ji
30,000-20,000= $10,000 ji
11. 11.
EBIT: $1,000,000 j i
Depreciation: $30,000 j i
Changein working capital($5,000) ji ji
Net capital expenditures: $10,000
ji ji ji ji
Tax rate: 40%
ji ji ji
What is the company’s free cash flow?
ji ji ji ji ji j i
1,000,000*(1-.40)+30,000)–(-5,000)–10,000 = 625,000 ji ji ji ji ji ji ji ji
12. Define Free Cash Flow? j i j i j i
Represents the cash availablefor the company torepay creditors or pay dividends and interestto investor ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
13. A company reported an increase in accounts payable of $4,000 during the recent
ji ji ji ji ji ji ji ji ji ji ji ji
period. Half of this amount is expected to be paid next period. What is the impact on the
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
cash flow from operating activities?
ji ji ji ji ji
Increase of $4000 ji ji
14. An architect will receive $10,000 per year (at the end of the year) PMT for 10 years.
ji ji ji j i j i ji j i ji j i j i ji j i ji j i j i ji
The annual interest earned on the investment is 6%. What is the present value of the
ji ji ji ji ji ji ji j i ji ji ji ji ji ji j i ji
architect’s investment?
ji ji
10,000 PMT (at the end of each year) 6 ji ji ji ji ji ji ji ji
I/Y
ji
10 N ji
CPT PV = -7360008705 ji ji ji
15. An employee wants to retire 20 years from today and would like to have an annual
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
income of $300,000 per year for 10 years starting in exactly 20 years. The discount
ji j i ji j i j i j i j i ji ji j i ji j i ji j i ji
rate is 6%. What is the present value, today?
ji ji ji ji ji ji ji ji ji
Exam Latest Questions and Answers ()
(Verified Answers)
1. What does the Foreign Corrupt Practices Act forbid U.S. companies to
ji ji ji ji ji ji ji j i ji ji
do?
ji
Prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals.
ji ji ji ji ji ji ji ji ji ji ji ji ji ji
2. What are two basic types of financial instruments?
j i j i j i ji j i ji j i
Stocks and Bonds ji ji
3. What are secondary markets? j i j i j i
Secondaryfinancialmarketsare wheresecurities aretraded afterthe initial offering.
ji ji ji ji ji ji ji ji ji ji ji
4. What do cash flows from operating activities report?
j i ji ji ji ji j i j i
Operating – day to day operations ji ji ji ji ji
Investing–Property,plant,equipment,longtermitems
ji ji ji ji ji ji ji
Financing – debt and equity changes
ji ji ji ji ji ji
5. What does the statement of cash flows report?
j i ji j i j i ji j i j i
Cashinflowandcashoutflowofbusinessforperiodoftime
ji ji ji ji ji ji ji ji ji ji
6. Write the equation that links the income statement to the balance sheet?
ji j i j i j i ji j i j i j i ji ji ji
New Re= Old RE + Net Income – dividends
ji ji ji ji ji ji ji ji
7.
Net income
ji 2,000
Depreciation 500
Changeinoperatingassets ji ji ji 400
ChangeinPPE ji ji 1,000
Changeonlongtermliabilities
ji ji ji ji 600
,Dividends paid ji 100
What is the firm’s cash flow from financing activities? CFF
ji ji ji ji j i ji ji ji ji
Increase in debt 600 + (no change in stock) 0 – (dividends paid) 100 = 500
j i j i j i j i j i j i j i j i j i j i j i j i j i j i j i
8. Describe an income statement? j i j i j i
Anincomestatement is a financial statement thatshows you how profitable your business was over a given
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
reporting period. It shows your revenue, minus your expenses and losses
ji ji ji ji ji ji ji ji ji ji ji
, 9. What item is included in the income statement and not included in the
ji j i ji j i ji ji ji j i ji ji j i ji
statement of cash flows.
ji j i ji j i
Depreciation
10. A company sold goods in 2016 for $30,000 and collected the cash in 2017. In 2016, the
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
company incurred and paid $20,000 in expenses related to the goods sold. How
ji ji j i ji ji j i ji j i j i ji ji ji ji
much income should the company report in 2016 under the accrual basis of accounting?
ji ji ji ji ji ji ji ji ji ji ji ji j i ji
30,000-20,000= $10,000 ji
11. 11.
EBIT: $1,000,000 j i
Depreciation: $30,000 j i
Changein working capital($5,000) ji ji
Net capital expenditures: $10,000
ji ji ji ji
Tax rate: 40%
ji ji ji
What is the company’s free cash flow?
ji ji ji ji ji j i
1,000,000*(1-.40)+30,000)–(-5,000)–10,000 = 625,000 ji ji ji ji ji ji ji ji
12. Define Free Cash Flow? j i j i j i
Represents the cash availablefor the company torepay creditors or pay dividends and interestto investor ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
13. A company reported an increase in accounts payable of $4,000 during the recent
ji ji ji ji ji ji ji ji ji ji ji ji
period. Half of this amount is expected to be paid next period. What is the impact on the
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
cash flow from operating activities?
ji ji ji ji ji
Increase of $4000 ji ji
14. An architect will receive $10,000 per year (at the end of the year) PMT for 10 years.
ji ji ji j i j i ji j i ji j i j i ji j i ji j i j i ji
The annual interest earned on the investment is 6%. What is the present value of the
ji ji ji ji ji ji ji j i ji ji ji ji ji ji j i ji
architect’s investment?
ji ji
10,000 PMT (at the end of each year) 6 ji ji ji ji ji ji ji ji
I/Y
ji
10 N ji
CPT PV = -7360008705 ji ji ji
15. An employee wants to retire 20 years from today and would like to have an annual
ji ji ji ji ji ji ji ji ji ji ji ji ji ji ji
income of $300,000 per year for 10 years starting in exactly 20 years. The discount
ji j i ji j i j i j i j i ji ji j i ji j i ji j i ji
rate is 6%. What is the present value, today?
ji ji ji ji ji ji ji ji ji
