D076 OA Exam Questions And Well
Elaborated Solutions |verified 100%
correct|
What is the ratio that tells you on average how long it takes for a firm to collect
accounts receivable.
Average Benchmarking
Opportunity cost
Average collection period
Leading indicator - ANSWER -Average collection period
Three different names are used for interest rate for different purposes and
perspectives:
Discount rate, required rate, and cost of capital.
Required rate, correlated indicator, opportunity cost
Cost of capital, interest rate, and renew rate
required rate, discount method, cost of interest - ANSWER -Discount rate,
required rate, and cost of capital.
What is the main purpose of charging interest?
interest can be a good tool because it summarizes the required return, but it is a
detriment because it requires a larger cost of capital.
The higher risk an investor takes, the higher return the investor expects to receive.
Compounding interest can be a good tool to understand the time value of money,
but it is a detriment because it does not take inflation into account.
It allows borrowers to pay to use the assets of another entity to accomplish their
own goals. - ANSWER -It allows borrowers to pay to use the assets of another
entity to accomplish their own goals.
, The required rate of return is also known as the BLANK in the context of
corporate finance.
Inflation
Hurdle rate
Opportunity cost
Risk - ANSWER -Hurdle rate.
The BLANK is the rate of return or compensation that an investor or lender will
accept for investments such as stocks, bonds, or loans.
Hurdle rate
Inflation
Opportunity cost
Required rate of return - ANSWER -Required rate of return
BLANK Is the possibility that the realized or actual return will differ from the
expected return?
Hurdle rate.
Inflation
Opportunity cost
Risk - ANSWER -Risk
Which components of an interest rate is an indicator of inflation and opportunity
cost?
Capital growth rate
Risk-free rate
Sustainable growth rate
Sales growth rate - ANSWER -Risk-free rate
What is the name for the interest rate expressed on an annual basis?
Sustainable growth rate
, Historical regression
Annual percentage rate
Annual Percent of sales - ANSWER -Annual percentage rate
Why is the required rate of return also known as the hurdle rate?
It is simple and helps ensure that users do not spend more than the cash that they
have available.
It is the minimum rate that a firm must surpass to accept a project.
It enables users to connect bank and credit card accounts to automatically update
income and expenses.
It is the maximum rate that a firm must surpass to deny a project. - ANSWER -It is
the minimum rate that a firm must surpass to accept a project.
You want to buy a house, so you obtain a mortgage for which you can afford the
monthly mortgage payment. What process have you engaged in as part of your
financial decision making?
Profit turnover
Gross margin
Financing
Accounts receivable turnover - ANSWER -Financing
What area of finance involves deciding which assets to invest in to create wealth
in the future?
Financial forecasting
Ratio analysis
Accounting
Investments - ANSWER -Investments
Hannah is the financial manager. A project approved and will cost $5million.
Since the company does not have enough cash on reserve, she must figure out how
to raise enough money to start the project. She can choose bonds, new stocks, a
mortgage loan, or some combo. What task is Hannah performing in this scenario?
Elaborated Solutions |verified 100%
correct|
What is the ratio that tells you on average how long it takes for a firm to collect
accounts receivable.
Average Benchmarking
Opportunity cost
Average collection period
Leading indicator - ANSWER -Average collection period
Three different names are used for interest rate for different purposes and
perspectives:
Discount rate, required rate, and cost of capital.
Required rate, correlated indicator, opportunity cost
Cost of capital, interest rate, and renew rate
required rate, discount method, cost of interest - ANSWER -Discount rate,
required rate, and cost of capital.
What is the main purpose of charging interest?
interest can be a good tool because it summarizes the required return, but it is a
detriment because it requires a larger cost of capital.
The higher risk an investor takes, the higher return the investor expects to receive.
Compounding interest can be a good tool to understand the time value of money,
but it is a detriment because it does not take inflation into account.
It allows borrowers to pay to use the assets of another entity to accomplish their
own goals. - ANSWER -It allows borrowers to pay to use the assets of another
entity to accomplish their own goals.
, The required rate of return is also known as the BLANK in the context of
corporate finance.
Inflation
Hurdle rate
Opportunity cost
Risk - ANSWER -Hurdle rate.
The BLANK is the rate of return or compensation that an investor or lender will
accept for investments such as stocks, bonds, or loans.
Hurdle rate
Inflation
Opportunity cost
Required rate of return - ANSWER -Required rate of return
BLANK Is the possibility that the realized or actual return will differ from the
expected return?
Hurdle rate.
Inflation
Opportunity cost
Risk - ANSWER -Risk
Which components of an interest rate is an indicator of inflation and opportunity
cost?
Capital growth rate
Risk-free rate
Sustainable growth rate
Sales growth rate - ANSWER -Risk-free rate
What is the name for the interest rate expressed on an annual basis?
Sustainable growth rate
, Historical regression
Annual percentage rate
Annual Percent of sales - ANSWER -Annual percentage rate
Why is the required rate of return also known as the hurdle rate?
It is simple and helps ensure that users do not spend more than the cash that they
have available.
It is the minimum rate that a firm must surpass to accept a project.
It enables users to connect bank and credit card accounts to automatically update
income and expenses.
It is the maximum rate that a firm must surpass to deny a project. - ANSWER -It is
the minimum rate that a firm must surpass to accept a project.
You want to buy a house, so you obtain a mortgage for which you can afford the
monthly mortgage payment. What process have you engaged in as part of your
financial decision making?
Profit turnover
Gross margin
Financing
Accounts receivable turnover - ANSWER -Financing
What area of finance involves deciding which assets to invest in to create wealth
in the future?
Financial forecasting
Ratio analysis
Accounting
Investments - ANSWER -Investments
Hannah is the financial manager. A project approved and will cost $5million.
Since the company does not have enough cash on reserve, she must figure out how
to raise enough money to start the project. She can choose bonds, new stocks, a
mortgage loan, or some combo. What task is Hannah performing in this scenario?
