Financial Accounting > QUESTIONS & ANSWERS > C214|Western Governors University|QUESTIONS AND ANSWER CHECKLIST ALL CORRECT (All)
C214|Western Governors University|QUESTIONS AND ANSWER CHECKLIST ALL CORRECT
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Which will be larger: actual taxes payable or accounting income tax expense Correct Answer: Accounting tax expense will be higher; actual taxes based on IRS rules will be lower Which cash flow meas... ures the change in long term assets? Correct Answer: Cash flow investing Which financial ratios measure "efficiency"? Correct Answer: Asset turnover and Fixed Asset turnover Which ratio is the best measure of a firm's ability to pay bills? Correct Answer: Quick ratio Which decision requires using subjective estimates? Correct Answer: Useful (depreciable) life of a new asset What is the yield to maturity of a bond? Correct Answer: The return earned from purchase date to maturity If a bond pays $50 interest per year and yields 4%, what is its price? Correct Answer: Premium price; i.e. $50 interest = 5% coupon; if Coupon>Yield, premium price If a firm buys a 90-day Treasury bill, where is it carried on the balance sheet? Correct Answer: Current asset How does a "prudent investor" select investments? Correct Answer: Seeks the highest return for "reasonable" amount of risk What is added to net income to derive net cash flow? Correct Answer: Depreciation expense What is the difference between WACC and CAPM's required return? Correct Answer: CAPM includes only equity required return; WACC includes debt & equity [Show More]
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