WGU C214 Financial Management Concepts Questions and Answers

WGU C214 Financial Management Concepts
Questions and Answers
Question 1
Which security type includes the right to vote for a board of directors?
A. Preferred stock
B. Money market funds
C. Bonds
D. Common stock
Correct Answer
d



Question 2
PV ordinarily is less than FV. What would cause the opposite?
a. Compounding
b. Negative interest rates
c. The exchange rate
d. The Federal Reserve
Correct Answer
b



Question 3
What should a company do to manage its working capital?
a. Collect quickly and pay slowly
b. Keep a large cash balance
c. Maximize the use of long term investment
d. Depreciate assets more slowly
Correct Answer
a




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,Question 4
Efficient markets will often have mispriced securities
Correct Answer
F



Question 5
What is the priority order of repayment (first to last) to a company's investors and
creditors?
A. Creditors, common stockholders, preferred stockholders

B. Preferred stockholders, creditors, common stockholders

C. Creditors, preferred stockholders, common stockholders

D. Common stockholders, preferred stockholders, creditors
Correct Answer
c



Question 6
What does the Sarbanes-Oxley Act require companies to do?
a. Have a board of directors
b. Register all foreign sales
c. Make estimated tax payments
d. Have internal control audits
Correct Answer
d



Question 7
Which components are part of current assets?
a. Cash, Accounts Receivable, Property Plant & Equipment
b. Accounts Receivable, Accounts Payable, Inventory
c. Long Term Debt, Property Plant & Equipment, Common Stock
d. Inventory, Cash, Accounts Receivable, Short Term Investments
Correct Answer
d




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,Question 8
If a firm cannot access markets sufficiently to meet their DFN, what strategies might
they use?
a. Slow sales growth
b. Lower dividend payout
c. Increase the net margin
d. All of the above.
Correct Answer
d



Question 9
Stocks that are listed on dealer markets generally have a single dealer for each stock.
Correct Answer
F



Question 10
What is true about the cash flow from the operating activities section of the
statement of cash flows?
A. Increases in current liability accounts represents an inflow of cash and should be
added to net income

B. Decreases in current liability accounts represent an outflow of cash and should be
added to net income

C. Increases in current liability accounts represent an outflow of cash and should be
subtracted from net income

D. Decreases in current liability accounts represent an inflow of cash and should be
added to net income
Correct Answer
a




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, Question 11
Which is not a component of the DuPont formula?
a. Net Income to Sales
b. Debt to Equity Ratio
c. Sales to Asset Ratio
d. Assets to Equity Ratio
Correct Answer
b



Question 12
Which of the following characterizes collection float
a. Longer float indicates good financial practices
b. Increased float indicates slower processing time
c. Accounts receivable increase with shorter float
d. Liquidity is enhanced with longer float
Correct Answer
b



Question 13
What does the Degree of Financial Leverage indicate?
a. The firms cash balance
b. The cost of financed assets
c. The reliance on debt
d. The reliance on assets
Correct Answer
c




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