WGU C214 FINANCIAL MANAGEMENT PASS THE OA
EXAM|150 QUESTIONS AND ANSWERS| UPDATE|A
GRADED
If accounts receivable increases, what is the impact on CFO? - (ANSWER)CFO
decreases
Are actual taxes paid the same as how on the GAAP income statement? -
(ANSWER)No.
Actual Taxes = IRS Rules
Income Statement = GAAP
Which decisions require using subjective estimates? - (ANSWER)Economic life of
a new asset.
If there is a 30% change of a recession, what is the probability of expansion? -
(ANSWER)70%
*The sum of probabilities must equal 100%
How much interest is paid on a 6% bond over 2 years and 3 months? -
(ANSWER)2 years and 3 months:
2 + (3/12) = 2 + (.25) = 2.25
, 6% x 1,000 = $60 per year
$60 x 2.25 = $135
How does a "prudent investor" select investments? - (ANSWER)Seeks the highest
return for "appropriate" amount of risk.
What do points on the Efficient Frontier measure? - (ANSWER)The maximum
return for a given level of risk; maximum Return-to-Risk ratio.
What is "Beta?" - (ANSWER)Measure of a stock's risk relative to the market.
Why are accurate forecasts important? - (ANSWER)Plan for resources for
production; accurate evaluation of capital projects.
Which ratio is used in valuing a private company? - (ANSWER)PE ratio in the
"Comparable Multiples" method.
What are 3 costs associated with holding inventory? - (ANSWER)1. Product
2. Storage
3. Opportunity
EXAM|150 QUESTIONS AND ANSWERS| UPDATE|A
GRADED
If accounts receivable increases, what is the impact on CFO? - (ANSWER)CFO
decreases
Are actual taxes paid the same as how on the GAAP income statement? -
(ANSWER)No.
Actual Taxes = IRS Rules
Income Statement = GAAP
Which decisions require using subjective estimates? - (ANSWER)Economic life of
a new asset.
If there is a 30% change of a recession, what is the probability of expansion? -
(ANSWER)70%
*The sum of probabilities must equal 100%
How much interest is paid on a 6% bond over 2 years and 3 months? -
(ANSWER)2 years and 3 months:
2 + (3/12) = 2 + (.25) = 2.25
, 6% x 1,000 = $60 per year
$60 x 2.25 = $135
How does a "prudent investor" select investments? - (ANSWER)Seeks the highest
return for "appropriate" amount of risk.
What do points on the Efficient Frontier measure? - (ANSWER)The maximum
return for a given level of risk; maximum Return-to-Risk ratio.
What is "Beta?" - (ANSWER)Measure of a stock's risk relative to the market.
Why are accurate forecasts important? - (ANSWER)Plan for resources for
production; accurate evaluation of capital projects.
Which ratio is used in valuing a private company? - (ANSWER)PE ratio in the
"Comparable Multiples" method.
What are 3 costs associated with holding inventory? - (ANSWER)1. Product
2. Storage
3. Opportunity
