WGU C214 OA Question and Answers Checklist | all answers provided

WGU C214 OA Q&A Checklist Which will be larger: accrual taxes payable or accounting income tax expense Correct Answer: Accounting tax expense will be higher; actual taxes based on IRS rules will be lower Which financial ratios measure "efficiency"? Correct Answer: Asset turnover and Fixed Asset turnover Which ratio is the best measure of a firm's ability to pay bills? Correct Answer: Quick Ratio Which decision requires using subjective estimates? Correct Answer: Economic life of a new asset What is the yield to maturity on a bond? Correct Answer: The return earned from the purchase date to maturity If a firm buys a 30-day CD, where is it carried on the balance sheet? Correct Answer: Cash and ST in current assets How does a "prudent investor" select investments? Correct Answer: Seeks the highest return for "reasonable" amount of risk What is the difference between WACC and CAPM's required return? Correct Answer: CAPM includes only equity required return; WACC includes debt and equity What do points on the Efficient Frontier measure? Correct Answer: The maximum return for a given level of risk; maximum Return-to-risk ratio What is Beta? Correct Answer: Measure of volatility of a stock's risk relative to the market Why are accurate forecasts important? Correct Answer: Plan for resources to support sales Which leverage measure shows the impact of EBIT changes on pre-tax profit (EBT)? Correct Answer: Financial leverage