WGU C214 FINANCE MANAGEMENT
PVCC UPDATED CORRECT 100%
How can a private firm appropriately maximize shareholder value? - ANSWER 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? - ANSWER Because international investing in a global marketplace is the
concern of American investors
What is one of the two basic types of financial instruments? - ANSWER Bonds
What are the likeliest outcomes if a company outsources the manufacturing of its
products to a foreign country?
Choose 2 - ANSWER Consumer prices will decrease., Domestic employment will
decrease.
Which two effects does the unbundling and offshoring of production have on
employment when the global value chain is taken into consideration? - ANSWER
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? - ANSWER 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? - ANSWER 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? - ANSWER 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 this firm's cash flow from investments, using the data above and assuming no
asset disposals? - ANSWER $5,300 outflow
What is the basic equation for a balance sheet? - ANSWER Assets=liabilities+equity
What do cash flows from investing activities generally relate to? - ANSWER A firm's
purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities? - ANSWER Cash
sales to customers
What does free cash flow represent? - ANSWER 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? -
ANSWER The firms have different fiscal years
A company's year-end balance sheet for 2013 shows the following:
AR: 900
Inventory: 1200
Fixed assets: 1000
AP: 1300
Sales: 4000
Salaries: 275
What is their fixed asset turnover ratio? - ANSWER Net Sales / Average Net Fixed
Assets Sales @ 4000 / Fixed Assets @ 1000= 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? -
ANSWER 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? - ANSWER The product must have been
delivered
What is an example of an inventory method for accounting purposes? - ANSWER Last
in, first out method
PVCC UPDATED CORRECT 100%
How can a private firm appropriately maximize shareholder value? - ANSWER 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? - ANSWER Because international investing in a global marketplace is the
concern of American investors
What is one of the two basic types of financial instruments? - ANSWER Bonds
What are the likeliest outcomes if a company outsources the manufacturing of its
products to a foreign country?
Choose 2 - ANSWER Consumer prices will decrease., Domestic employment will
decrease.
Which two effects does the unbundling and offshoring of production have on
employment when the global value chain is taken into consideration? - ANSWER
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? - ANSWER 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? - ANSWER 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? - ANSWER 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 this firm's cash flow from investments, using the data above and assuming no
asset disposals? - ANSWER $5,300 outflow
What is the basic equation for a balance sheet? - ANSWER Assets=liabilities+equity
What do cash flows from investing activities generally relate to? - ANSWER A firm's
purchase and sale of long-term assets
Which transaction is reflected in cash flow from operating activities? - ANSWER Cash
sales to customers
What does free cash flow represent? - ANSWER 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? -
ANSWER The firms have different fiscal years
A company's year-end balance sheet for 2013 shows the following:
AR: 900
Inventory: 1200
Fixed assets: 1000
AP: 1300
Sales: 4000
Salaries: 275
What is their fixed asset turnover ratio? - ANSWER Net Sales / Average Net Fixed
Assets Sales @ 4000 / Fixed Assets @ 1000= 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? -
ANSWER 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? - ANSWER The product must have been
delivered
What is an example of an inventory method for accounting purposes? - ANSWER Last
in, first out method
