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Exam (elaborations)
D076- Finance skills for managers TESTS
1What are the purposes of financial markets? - To provide liquidity and determine prices A company is trying to finance a project with a mortgage loan from a bank. The company's assessment of the project indicates that the company may experience several years of loss until the project becomes profitable. This means that the company might lose its ability to pay back the loan and the interest on the mortgage. What action might the bank take to protect its interest? - Set a strict covenant t...
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Exam (elaborations)
D076- FINANCE- MASTER LIST
A potential project to expand the size of an apartment complex will cost $100,000. Its calculated net present value is $5,000. Given this information, which statement is correct? - The project should be accepted because it has a positive NPV. The YTM of a bond went from 8% to 7%. What can be predicted about the price of the bond? - It will increase. 0 / 1 The company Betsy's Wigs is considering three potential projects that are not mutually exclusive. The IRR, NPV, and PI for each projec...
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Exam (elaborations)
D076 Finance By ME (Module Quizzes)
A company currently has a ratio of 1.5 but hopes to improve the ratio to 2 to align more with the industry benchmark. To achieve this goal, costs were cut in production through an investment in efficient equipment, and the company achieved a higher profit margin. If this continues, you are certain that the firm will achieve its goal in two years. What is this an example of? a) Flexibility b) Trend analysis c) Cross-sectional analysis d) Progress measurement - d) Progress measurement You ...
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Exam (elaborations)
D076 Finance Skills for Management new study set
A local start-up company just hit its five-year anniversary and is planning an initial public offering sometime this year. In order to issue public stock, which market will the company use? - Primary market About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while the 10-year Treasury note has an interest rate of 2.28%. What does this information indicate abou...
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Exam (elaborations)
D076 Finance Skills for Managers - Pre Assessment
In which way is accounting different from finance? - Accounting is backward looking, while finance is focused on the future. What is the main question that both individuals and companies must consider when making financial decisions to reach a goal? - Will the benefits of the action outweigh the cost? A financial manager at a company is trying to determine whether to issue new stocks or new bonds to cover the costs of a project the company is doing the next year. - Making Financing Decision...
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Exam (elaborations)
D076 Finance Skills for Managers - (QUIZ)
Unit 2 (Module 1) What area of finance involves deciding which assets to invest in to create wealth in the future? - Unit 2 Investments (Investments are an area of finance that involves deciding which assets to invest in to create wealth in the future.) Hannah is the financial manager of a firm. A project that she has recommended has been approved and will cost $5 million. Since the company does not have enough cash on reserve, Hannah must figure out how to raise enough money to start t...
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Exam (elaborations)
D076 Finance Skills for Managers - (TEST)
A company's officers and board of directors are selling their stocks in the firm at higher prices due to false accounting reports that made the stock seem more valuable than it truly was. Which ethical issue is occurring in this situation? - Agency problem due to conflicting interests (Correct! Accounting manipulation by management in pursuit of higher stock-related compensation is an example of an agency problem.) A financial analyst for the company Bobby's Books has been asked to evalua...
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Exam (elaborations)
D076 Finance Skills for Managers - Unit 3
Interest Rate - the percentage of the principal that a lender charges a borrower for the use of assets. Annual precentage rate (APR) - The annual interest rate that is charged for borrowing money or that is earned through investment. Discount Rate - The name for interest rate when used in time value of money calculations. Cost of Capital - The cost to a firm to use an investor's capital; see interest rate 2 Types of interest - Simple and Compound Simple Interest - The interest earned onl...
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Exam (elaborations)
D076 Finance Skills for Managers - U9 (Part 1)
Balance Sheet Forecasting - is typically done in conjunction with projecting in come statement. Helps understand future asset earning and potential of the company Sources and uses of funds Budgeting - is a detailed representation of the future results, financial position, and cash flows that management wants to achieve during a certain period. Includes variance analysis Budgeting Vs Forecasting (NOT THE SAME) - Budgeting - Where management wants to take the company. Quantifies the expected...
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Exam (elaborations)
D076 Finance Skills for Managers ASSESSMENT ALREADY passed
A company calculated variances of a budget and actual cash flows that indicate the firm's strengths and weaknesses in cash flows and its budgeting process. Which major use of cash budgeting is this an example of? Standardization Performance evaluation Assessment of future needs Corrective action - Performance evaluation A company is developing a financial forecast for the next year. The company plans to implement a new factory that will increase production and resulting sales by 20%. S...
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Exam (elaborations)
D076 Finance Skills for Managers EXAMS 100%
Which area of finance deals with sources of funding and the capital structure of corporations and seeks to increase the value of a firm to its owners? - Business finance What is the primary difference between finance and accounting? - Finance focuses on the future, while accounting is generally backward-looking. Which subspecialty of finance primarily involves deciding which assets will create more wealth and earn positive returns? - Investments What is the primary goal of the financial ma...
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Exam (elaborations)
D076 Finance Skills for Managers QUIZ RATED A
Accounting - The system of recording, reporting, and summarizing past financial information and transactions. Accounts Receivable Turnover (AR Turnover) - An activity ratio found by credit sales divided by accounts receivable. Activity Ratios - A category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability. Additional Funds Needed (AFN) - Another name for the discretionary financing needed or exte...
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Exam (elaborations)
D076 Finance Skills for Managers review
A company is trying to decide which of four projects to invest in. - "W&H Company wants to create a cash budget to better manage its cash flows. The financial manager knows that the firm's labor costs and materials costs are too high for the level of sales each month. The firm also needs to keep better track of its cash flows to assess its need for additional financing through short-term loans. - A company called Bobby's Books is considering purchasing a new bookbinding machine. The co...
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Exam (elaborations)
D076 Finance Skills for Managers Terms and questions for module 5
Ordinary annuities - a series of equal payments made at the end of consecutive periods over a fixed length of time Annuities due - a series of equal payments made at the beginning of consecutive periods Perpetuities - a constant stream of identical cash flows that continues forever Compounding - finding a future value given a present value Discounting - finding a present value given a future value. Time value of money - the idea that money that is available at the present time is worth mor...
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Exam (elaborations)
D076 Finance Skills for Managers WGU GUIDE VERIFIED
Real Return - Rate of growth in purchasing power of goods and services Holding Period Return - Return over the entire period that an investor owns a financial security Beta - A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. standard deviation - Used to measure the total risk of securities annuity due - an annuity whose payments occur at the beginning of each period, consecutively Par Bond - When the bond's coupon rate eq...
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Exam (elaborations)
D076 Finance Skills for Managers)- Module 2 PASSED
A local start-up company just hit its five-year anniversary and is planning an initial public offering sometime this year. In order to issue public stock, which market will the company use? - Primary market When a company issues stock for the first time to raise capital, shares must initially be sold through a primary market. About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has an inter...
muchirigathiru1
Exam (elaborations)
D076 Finance Skills Review/Study Guide
Finance - the study of managing and allocating funds at the personal or business level; forward looking What are the subspecialties of finance? - business finance, investments, and financial institutions Corporate finance - an area of finance that involves activities used to increase shareholder wealth Investments - an area of finance that deals with investment allocation and asset pricing financial institutions - an area of finance that involves organizations that accept deposits, offer i...
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Exam (elaborations)
D076 Finance Skills study test
20 years ago Mateo started an investment account with $2000. He then invested $100 into the account every month at the end of each month. Today, he has $46,528 I. The same account. What is the term for the $100 monthly cash flows? - Annuity A company calculated variances of a budget and actual cash flows that indicate the firm's strengths and weaknesses in cash flows and its budgeting process. Which major use of cash budgeting is this an example of? - performance evaluation A company is d...
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Exam (elaborations)
d076 finance STUDY GUIDE
what is the difference between finance and accounting - The easiest way to describe these differences is that finance is forward-looking, or focuses primarily on the future, while accounting is generally backward-looking and focuses on the past. There are three primary areas in the world of finance: - Business finance Investments Financial institutions This area involves deciding which assets to invest in to create wealth in the future. - Investment The process of valuing assets - ASSETS ...
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Exam (elaborations)
D076 Financial Skills for Managers EXAMS ALREADY PASSED
Finance vs. Accounting - Finance ~ Forward thinking Accounting ~ Looking at the past Finance defintion - Management and allocation of capital with the objective of investing, forecasting, budgeting, saving, borrowing, lending, and so on. Business finance - area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the value of a firm for its owners, and the tools and analysis used to allocate financial resources. O...
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