WGU 214. FINANCIAL MANAGEMENT PVCC. Pre-Assessment Questions and Answers Graded A+

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WGU 214. FINANCIAL MANAGEMENT PVCC. Pre-Assessment Questions and Answers Graded A+ 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 An accountant is 40 years old with an anticipated retirement age of 70 years old. The accountant plans to save $6,000 per year at the end of the next 30 years to fund retirement. How much will the accountant have upon retirement, if the accountant is able to earn 4% annually on this investment? ✔✔$336,510 An investor deposits $2,000 per year (beginning today) for 10 years in a 4% interest bearing account. The last cash flow is received 1 year prior to the end of the tenth year. What is the investor's future balance after 10 years? ✔✔$24,973 What is the par value (face value) of a b [Show More]

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