WGU FC214 FOA FFINANCIAL FMANAGEMENT FRETAKE
FEXAM
1. What fdoes fthe fForeign fCorrupt fPractices fAct fforbid f U.S.
fcompanies fto fdo?
Prohibits f U.S. f firms f and f individuals f from f paying f bribes f to f foreign f officials f to f further
f business f deals.
2. What f are f two f basic f types f of f financial f instruments?
Stocks f and f Bonds
3. What f are f secondary f markets?
Secondary ffinancial fmarkets fare fwhere fsecurities fare ftraded fafter fthe
finitial foffering.
4. What f do f cash f flows f from foperating f activities f report?
Operating f– fday fto fday foperations
Investing f– fProperty, fplant, fequipment, flong
fterm fitems fFinancing f– fdebt fand fequity
fchanges
5. What f does f the f statement f of f cash f flows f report?
Cash finflow fand fcash foutflow fof fbusiness ffor fperiod fof ftime
6. Write fthe f equation f that f links f the f income f statement f to f the f balance fsheet?
New fRe= fOld fRE f+ fNet fIncome f– fdividends
7.
Net fincome 2,00
0
Depreciation 500
Change fin foperating fassets 400
Change fin fPPE 1,00
0
Change fon flong fterm 600
fliabilities
Dividends fpaid 100
What f is f the f firm’s f cash f flow ffrom ffinancing f activities? f CFF
,Increase f in f debt f 600 f + f (no f change f in f stock) f 0 f – f (dividends f paid) f 100
f = f 500
8. Describe f an f income f statement?
An fincome fstatement fis fa ffinancial fstatement fthat fshows fyou fhow fprofitable fyour
fbusiness fwas fover fa fgiven freporting fperiod. fIt fshows fyour frevenue, fminus fyour
fexpenses fand flosses
, 9. What fitem f is fincluded f in fthe fincome f statement f and fnot
fincluded f in fthe fstatement f of fcash f flows.
Depreciation
10. A fcompany fsold fgoods fin f2016 ffor f$30,000 fand fcollected fthe fcash fin
f2017. fIn f2016, fthe fcompany fincurred f and fpaid f$20,000 f in fexpenses
f related f to fthe fgoods fsold. fHow fmuch fincome fshould fthe fcompany
freport fin f2016 funder fthe faccrual fbasis f of faccounting?
30,000-20,000= f$10,000
11. 11.
EBIT: f $1,000,000
Depreciation: f $30,000
Changein fworking
fcapital($5,000) fNet fcapital
fexpenditures: f$10,000 fTax
frate: f40%
What f is f the f company’s f free f cash f flow?
1,000,000*(1-.40) f+ f30,000) f– f(-5,000) f– f10,000 f= f625,000
12. Define f Free f Cash f Flow?
Represents fthe fcash favailable ffor fthe fcompany fto frepay fcreditors for fpay fdividends
fand finterest fto finvestor
13. A fcompany freported fan fincrease fin faccounts fpayable fof f$4,000
fduring fthe frecent fperiod. fHalf fof fthis famount fis fexpected fto fbe fpaid
fnext fperiod. fWhat fis fthe fimpact fon fthe fcash fflow ffrom foperating
factivities?
Increase fof f$4000
14. An farchitect fwill freceive f $10,000 f per fyear f (at fthe f end f of fthe f year)
fPMT f for f 10 fyears. fThe fannual finterest fearned fon fthe finvestment f is f6%.
fWhat fis fthe fpresent fvalue f of fthe farchitect’s finvestment?
10,000 fPMT f(at fthe fend fof feach
fyear) f6 fI/Y
10 fN
CPT fPV f= f-7360008705
15. An femployee fwants fto fretire f20 fyears ffrom ftoday fand fwould flike fto
FEXAM
1. What fdoes fthe fForeign fCorrupt fPractices fAct fforbid f U.S.
fcompanies fto fdo?
Prohibits f U.S. f firms f and f individuals f from f paying f bribes f to f foreign f officials f to f further
f business f deals.
2. What f are f two f basic f types f of f financial f instruments?
Stocks f and f Bonds
3. What f are f secondary f markets?
Secondary ffinancial fmarkets fare fwhere fsecurities fare ftraded fafter fthe
finitial foffering.
4. What f do f cash f flows f from foperating f activities f report?
Operating f– fday fto fday foperations
Investing f– fProperty, fplant, fequipment, flong
fterm fitems fFinancing f– fdebt fand fequity
fchanges
5. What f does f the f statement f of f cash f flows f report?
Cash finflow fand fcash foutflow fof fbusiness ffor fperiod fof ftime
6. Write fthe f equation f that f links f the f income f statement f to f the f balance fsheet?
New fRe= fOld fRE f+ fNet fIncome f– fdividends
7.
Net fincome 2,00
0
Depreciation 500
Change fin foperating fassets 400
Change fin fPPE 1,00
0
Change fon flong fterm 600
fliabilities
Dividends fpaid 100
What f is f the f firm’s f cash f flow ffrom ffinancing f activities? f CFF
,Increase f in f debt f 600 f + f (no f change f in f stock) f 0 f – f (dividends f paid) f 100
f = f 500
8. Describe f an f income f statement?
An fincome fstatement fis fa ffinancial fstatement fthat fshows fyou fhow fprofitable fyour
fbusiness fwas fover fa fgiven freporting fperiod. fIt fshows fyour frevenue, fminus fyour
fexpenses fand flosses
, 9. What fitem f is fincluded f in fthe fincome f statement f and fnot
fincluded f in fthe fstatement f of fcash f flows.
Depreciation
10. A fcompany fsold fgoods fin f2016 ffor f$30,000 fand fcollected fthe fcash fin
f2017. fIn f2016, fthe fcompany fincurred f and fpaid f$20,000 f in fexpenses
f related f to fthe fgoods fsold. fHow fmuch fincome fshould fthe fcompany
freport fin f2016 funder fthe faccrual fbasis f of faccounting?
30,000-20,000= f$10,000
11. 11.
EBIT: f $1,000,000
Depreciation: f $30,000
Changein fworking
fcapital($5,000) fNet fcapital
fexpenditures: f$10,000 fTax
frate: f40%
What f is f the f company’s f free f cash f flow?
1,000,000*(1-.40) f+ f30,000) f– f(-5,000) f– f10,000 f= f625,000
12. Define f Free f Cash f Flow?
Represents fthe fcash favailable ffor fthe fcompany fto frepay fcreditors for fpay fdividends
fand finterest fto finvestor
13. A fcompany freported fan fincrease fin faccounts fpayable fof f$4,000
fduring fthe frecent fperiod. fHalf fof fthis famount fis fexpected fto fbe fpaid
fnext fperiod. fWhat fis fthe fimpact fon fthe fcash fflow ffrom foperating
factivities?
Increase fof f$4000
14. An farchitect fwill freceive f $10,000 f per fyear f (at fthe f end f of fthe f year)
fPMT f for f 10 fyears. fThe fannual finterest fearned fon fthe finvestment f is f6%.
fWhat fis fthe fpresent fvalue f of fthe farchitect’s finvestment?
10,000 fPMT f(at fthe fend fof feach
fyear) f6 fI/Y
10 fN
CPT fPV f= f-7360008705
15. An femployee fwants fto fretire f20 fyears ffrom ftoday fand fwould flike fto
