D364 Financial Management I Pre-Assessment: (PRPO)
Attempt #1 Status: Passed 2025 Western Governors
University
,D364 Financial Management 1 PA
Pre-Assessment: Financial
Management I (PRPO) Attempt #1
Status: Passed
1.
An analyst calculates a firm’s net working capital (NWC) to be $200 million and net operating
working capital (NOWC) to be $250 million.
What is the reason for the difference if the firm had no excess cash?
Your Correc
Answ t
er Answ
Addition of long-term er
debt Addition of
inventories Deduction of
free cash flow
Deduction of notes payable
2.
A company forecasted a sales growth of 30% for the next financial year. The company is evaluating
various strategies to manage the discretionary funds needed (additional funds needed) for this growth.
Currently, it has an inventory turnover ratio of 4.5.
Considering the facts provided, which strategy will lead to an increase in the discretionary funds
needed?
Your Correc
Answ t
er Answ
er
Optimizing the production process to reduce lead time
Increasing the sales price of goods
Reducing the safety stock levels
Offering bulk buying discounts to increase sales volume
,3.
An analyst is evaluating the change i
n financial ratios from one quarter to the otal current assets increased
from next. T nt liabilities increased from $30
$50 million to $55 million. Total million
curre to $32 million. Excess cash increased
from
, $5 million to $7 million. Notes payable were $8 million in both
periods.
What is the firm’s ending value of net operating working Correc
capital (NOWC)? t
Your Answ
Answer er
$16 million
$24 million
$29 million
$35 million
4.
What is a characteristic of an inverted yield curve
environment?
Your Correc
Answ t
er Answ
er
Long-term rates are lower than short-term.
Firms borrow at the prime rate.
Nominal rates are lower than effective rates.
Interest compounds daily instead of monthly.
5.
A company is planning to implement all of the following strategy changes in the current year:
Attempt #1 Status: Passed 2025 Western Governors
University
,D364 Financial Management 1 PA
Pre-Assessment: Financial
Management I (PRPO) Attempt #1
Status: Passed
1.
An analyst calculates a firm’s net working capital (NWC) to be $200 million and net operating
working capital (NOWC) to be $250 million.
What is the reason for the difference if the firm had no excess cash?
Your Correc
Answ t
er Answ
Addition of long-term er
debt Addition of
inventories Deduction of
free cash flow
Deduction of notes payable
2.
A company forecasted a sales growth of 30% for the next financial year. The company is evaluating
various strategies to manage the discretionary funds needed (additional funds needed) for this growth.
Currently, it has an inventory turnover ratio of 4.5.
Considering the facts provided, which strategy will lead to an increase in the discretionary funds
needed?
Your Correc
Answ t
er Answ
er
Optimizing the production process to reduce lead time
Increasing the sales price of goods
Reducing the safety stock levels
Offering bulk buying discounts to increase sales volume
,3.
An analyst is evaluating the change i
n financial ratios from one quarter to the otal current assets increased
from next. T nt liabilities increased from $30
$50 million to $55 million. Total million
curre to $32 million. Excess cash increased
from
, $5 million to $7 million. Notes payable were $8 million in both
periods.
What is the firm’s ending value of net operating working Correc
capital (NOWC)? t
Your Answ
Answer er
$16 million
$24 million
$29 million
$35 million
4.
What is a characteristic of an inverted yield curve
environment?
Your Correc
Answ t
er Answ
er
Long-term rates are lower than short-term.
Firms borrow at the prime rate.
Nominal rates are lower than effective rates.
Interest compounds daily instead of monthly.
5.
A company is planning to implement all of the following strategy changes in the current year:
