WGU - C214 Financial Management –
Final Questions And Answers With
Verified Solutions Already Passed !!!
Statement of Cash Flows
ANSWER✔✔ Shows the change in cash balance for a period of time. Focuses
only on items where cash is received, or cash is paid.
Cash Flow from Operating Activities (CFO)
ANSWER✔✔ Cash flow that a company generates as a result of day-to-day
business operations. Deals with current assets and current liabilities.
Cash Flow from Investing Activities (CFI)
ANSWER✔✔ Cash flow that is generated from investments in long-term assets.
Cash Flow from Financing Activities (CFF)
ANSWER✔✔ Cash flow that is used to fund the company. Cash flow that is
generated from financing the business. Includes debt & equity.
How does an increase in Accounts receivable impact CFO?
ANSWER✔✔ An increase in Accounts receivable will decrease CFO.
How does an increase in Accounts payable impact CFO?
ANSWER✔✔ An increase in Accounts Payable will increase CFO.
What financial statement is prepared at a point in time?
ANSWER✔✔ Balance Sheet.
, What financial statements are prepared for a period of time?
ANSWER✔✔
Income Statement
Retained Earnings Statement
Statement of Cash Flows
Define Efficient Frontier
ANSWER✔✔ Maximizes expected return for a given level of risk.
Where would a risk-averse investor fall on the efficient frontier?
ANSWER✔✔ 100% Bonds.
Where would a risk-taking investor fall on the efficient frontier?
ANSWER✔✔ 100% Stocks.
What is a Beta?
ANSWER✔✔ A measure of risk. A Beta of 1 is the average risk of all stocks. A
beta below 1 means less risk, and above 1 indicates higher risk.
Define efficient market hypothesis as it relates to a firm?
ANSWER✔✔ For any company to survive, they need to make profitable
decisions. Otherwise, investors will shun their business. The firm needs to invest
where the return exceeds the cost.
What is the intrinsic value of a stock under efficient market hypothesis?
ANSWER✔✔ The intrinsic value of stock is the present value of the stock's after-
tax net cash flows.
Final Questions And Answers With
Verified Solutions Already Passed !!!
Statement of Cash Flows
ANSWER✔✔ Shows the change in cash balance for a period of time. Focuses
only on items where cash is received, or cash is paid.
Cash Flow from Operating Activities (CFO)
ANSWER✔✔ Cash flow that a company generates as a result of day-to-day
business operations. Deals with current assets and current liabilities.
Cash Flow from Investing Activities (CFI)
ANSWER✔✔ Cash flow that is generated from investments in long-term assets.
Cash Flow from Financing Activities (CFF)
ANSWER✔✔ Cash flow that is used to fund the company. Cash flow that is
generated from financing the business. Includes debt & equity.
How does an increase in Accounts receivable impact CFO?
ANSWER✔✔ An increase in Accounts receivable will decrease CFO.
How does an increase in Accounts payable impact CFO?
ANSWER✔✔ An increase in Accounts Payable will increase CFO.
What financial statement is prepared at a point in time?
ANSWER✔✔ Balance Sheet.
, What financial statements are prepared for a period of time?
ANSWER✔✔
Income Statement
Retained Earnings Statement
Statement of Cash Flows
Define Efficient Frontier
ANSWER✔✔ Maximizes expected return for a given level of risk.
Where would a risk-averse investor fall on the efficient frontier?
ANSWER✔✔ 100% Bonds.
Where would a risk-taking investor fall on the efficient frontier?
ANSWER✔✔ 100% Stocks.
What is a Beta?
ANSWER✔✔ A measure of risk. A Beta of 1 is the average risk of all stocks. A
beta below 1 means less risk, and above 1 indicates higher risk.
Define efficient market hypothesis as it relates to a firm?
ANSWER✔✔ For any company to survive, they need to make profitable
decisions. Otherwise, investors will shun their business. The firm needs to invest
where the return exceeds the cost.
What is the intrinsic value of a stock under efficient market hypothesis?
ANSWER✔✔ The intrinsic value of stock is the present value of the stock's after-
tax net cash flows.
