WGU C214 Finance Management PVCC Questions and Answers Already Passed

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WGU C214 Finance Management PVCC Questions and Answers Already Passed How can a private firm appropriately maximize shareholder value? ✔✔By making decisions that keep the control of the busines... s with the owners Why are American regulators focused on international investing in a global marketplace? ✔✔Because international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? ✔✔Bonds Which two effects does the unbundling and offshoring of production have on employment when the global value chain is taken into consideration? ✔✔Unbundling and offshoring allows firms to offer intermediate and final goods at lower prices, thus increasing employment. Unbundling and offshoring decreases costs, which results in expansion of sales and higher employment 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 are always recognized in the same period for accounting income purposes and income for tax purposes 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 different 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 companys year end balance sheet for 2013: AR: 900 Inventory: 1200 Fixed assets: 1000 AP: 1300 Sales: 4000 Salaries: 275 What is their fixed asset turnover ratio? ✔✔4.0 A firm has a ROE 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 is an example of an inventory method for accounting purposes? ✔✔Last in, first out method 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 his 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 bond? ✔✔The sum of money that the corporation promises to pay upon expiration of the bond A broker is considering purchasing common stock in a company that has average but consistent operating performance. Which factor should lead the broker to purchase shares in this company? ✔✔Intrinsic value is 25% below the current stock price A broker is considering buying a dividend-paying stock. The dividend will be paid at the end of the year. The analyst consensus is the stock will be worth $36 in one year. The company pays a $2.25 annual dividend (ex dividend date is not a consideration, the broker will receive the full $2.25), and the broker expects a 12% rate of return. What is the highest price the broker should be willing to pay for stock? ✔✔$34.15 A person buys shares of a company at $45. They recently paid a $2 annual dividend which is expected to grow by 10% per year. What is the expected return per year? ✔✔14.9% The market rate of return is 9%. The face value of the bond is $1000, the coupon rate is 9% with annual compounding, and the bond matures in 10 years. What is the value of the bond? ✔✔$1000 Which statement is true about fluctuations in bond prices? ✔✔When market interest rates fluctuate, the bond coupon rate is unchan [Show More]

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