WGU C214 Multiple Attempt Study Guide Graded A+

What standards are used to help US investors understand and compare foreign financial statements to domestic financial statements? - Answer-International Financial Reporting Standards When a company is optimizing its resources and maintaining or improving productivity, they are engaging in what hypothesis - Answer-Efficient Market Hypothesis What is the basic type of negotiable debt? - Answer-Bonds What is the characteristic of a stock sold in the secondary markets? - Answer-Stocks sold in the secondary markets are traded after the initial offering. If a company is engaged in lobbying for tariffs and trade restrictions, if they are successful, what are the two principal impacts? - Answer-Protection for the lobbyist and higher prices for the consumer pre reduced competition. Describe what an income statement is in one sentence? - Answer-It covers a period of time and starts with sales, takes out expenses, and ends with net income. What is the difference between taxable income and accounting income? - Answer-Accounting income is reported as net income on the income statement whereas Taxable income is used to determine the amount of tax a firm must pay. Net Income 15,000 Depreciation Exp 2,000 Change in Operating Assets 1,200 Change in PP&E 2,000 Change in long-term liab. 1,200 Dividends paid 1,500 What is the Cash Flow from Financing? - Answer-CFF= Incr Stock + Incr Debt -Dividends Paid = = -300 Net Income 121,000 Depreciation Expense 4,000 Accounts Receivable (30,000) Change in net PP&E 15,000 Accounts Payable (5,000) New Bank Loan 12,000 Dividends Paid 1,500 What is the Cash Flow from Investing? - Answer-CFI = Change in Net PPE + Depreciation Expense = 15,000 + 4,000 = 19,000 A grandmother sets up a trust for her grandson. She desires him to receive $20,000 per year. Her investment advisor finds an investment vehicle that will yield 7%. How much will the grandmother have to put into the investment? - Answer-20000/.07= 140*12 =1680.00 What is the number of payments of a semi-annual bond if the number of years remaining are 12? - Answer-There are 24 semi-annual payments remaining bWhat is the expected rate of return for a stock that has a eta of 2.1. The market rate is 8.5% with a risk free rate of 2%. - Answer-E[R]=Rf + B(Rm - Rf) =2% + 2.1(8.5%-2.0%) =.02 + 2.1(0.0850-.02) =.01565 or 15.65% A company has a trial balance that shows $13,000 in bonds payable. On which financial statement should this be shown? - Answer-This would be shown on the Balance Sheet under Long Term Liabilities