Preassessment score C214

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School

Western Governors University *

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Course

C214

Subject

Finance

Date

Feb 20, 2024

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pdf

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Uploaded by MagistrateUniverse27475

2/11/24, 4:29 PM WGU Student Portal https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/11147972/assessmentCode/PVCC/testDate/1707678554 1/18 PRE-ASSESSMENT: FINANCIAL MANAGEMENT (PVCC) Attempt #1 Status: Passed 1. How can a private ±rm appropriately maximize shareholder value? YOUR ANSWER CORRECT ANSWER By increasing the ±rm’s stock price By reducing the ±rm's labor By making decisions that keep the control of the business with the owners 2. Why are American regulators focused on international investing in a global marketplace? YOUR ANSWER CORRECT ANSWER Because international investing in a global marketplace is the concern of American investors Because an exclusively domestically focused regulatory approach is still effective Because weaving international concerns into domestic policy is cost-effective Because other jurisdictions have the same priorities and solutions as the United States 3. What is one of the two basic types of ±nancial instruments? YOUR ANSWER CORRECT ANSWER Checking accounts Bonds Euros Hedge funds 4. What are the likeliest outcomes if a company outsources the manufacturing of its products to a foreign country? Choose 2 answers. YOUR ANSWER CORRECT ANSWER Consumer prices will decrease. Tariffs will decrease. Domestic wages will increase. Production capacity will decrease. Domestic employment will decrease. WGU Knowledge Center Accessibility Policy Accessibility Settings

2/11/24, 4:29 PM WGU Student Portal https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/11147972/assessmentCode/PVCC/testDate/1707678554 2/18 5. What do the content and structure of a balance sheet report? YOUR ANSWER CORRECT ANSWER The gains and losses at a point in time The revenues and expenses for a period of time The assets, liabilities, and equity at a point in time The expenses, assets, and liabilities for a period in time 6. A company reported an increase in accounts receivable of $5,000 during the recent period. Half of this amount is expected to be collected next period. How will this change in accounts receivable affect the cash ²ows from the operating activities section? YOUR ANSWER CORRECT ANSWER The change will decrease cash ²ows from operations by $2,500. The change will increase cash ²ows from operations by $2,500. The change will increase cash ²ows from operations by $5,000. The change will decrease cash ²ows from operations by $5,000. 7. Which statement accurately explains the recognition of revenues and expenses under accounting income and income for tax purposes ? YOUR ANSWER CORRECT ANSWER Revenue and expenses recognized must be matched with assets. Revenue and expenses recognized must be matched with liabilities. Revenues and expenses may be recognized in one period for accounting income purposes and in a different period for income tax purposes. Revenues and expenses are always recognized in the same period for accounting income purposes and income for tax purposes. 8. Selected Data for 20x2 for ABD Inc. Net Income $ 1,000 Depreciation Expense $ 300 Change in Operating Assets $ 600 Change in Net Property, Plant, and Equipment $ 5,000 Changes in Long-Term Liabilities $ 1,000 Dividends Paid $ 200 What is this ±rm’s cash ²ow from investments, using the data above and assuming no asset disposals? YOUR ANSWER CORRECT ANSWER $5,000 in²ow $5,000 out²ow Accessibility Policy Accessibility Settings

2/11/24, 4:29 PM WGU Student Portal https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/11147972/assessmentCode/PVCC/testDate/1707678554 3/18 YOUR ANSWER CORRECT ANSWER $5,300 in²ow $5,300 out²ow 9. What is the basic equation for a balance sheet? YOUR ANSWER CORRECT ANSWER Revenue + expenses = income Assets = Liabilities − Equity Revenue + Assets = Equity Assets = Liabilities + Equity 10. What do cash ²ows from investing activities generally relate to? YOUR ANSWER CORRECT ANSWER A ±rm’s debt and equity transactions A ±rm’s purchase and sale of long-term assets A ±rm’s sale of goods and services A ±rm’s non-cash transactions 11. Which transaction is re²ected in cash ²ow from operating activities? YOUR ANSWER CORRECT ANSWER Amortization expense Gain or loss on the sale of property, plant, and equipment Credit sales to customers Cash sales to customers 12. What does free cash ²ow represent? YOUR ANSWER CORRECT ANSWER Cash ²ows from operating activities Cash balance at the end of the period Cash available for distribution after funding required reinvestment Cash available for dividends 13. An analyst is comparing the ratios of two ±rms and needs to address timing differences. What is an example of a timing difference between these two ±rms? Accessibility Policy Accessibility Settings

2/11/24, 4:29 PM WGU Student Portal https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/11147972/assessmentCode/PVCC/testDate/1707678554 4/18 YOUR ANSWER CORRECT ANSWER The ±rms have different ±scal years. The ±rms are in different industries. The ±rms use different depreciation methods. The ±rms use different inventory methods. 14. A company’s year-end balance sheet for 2013 shows the following: Accounts Receivable: $900 Inventory: $1,200 Fixed Assets: $1,000 Accounts Payable: $1,300 Sales: $4,000 Salaries Expense: $275 What is its ±xed asset turnover ratio? YOUR ANSWER CORRECT ANSWER 1.7 1.8 3.7 4.0 15. A ±rm has a ROE (return on equity) of 0.27, and the industry average ROE is 0.24. Which conclusion should an analyst draw when comparing this ±rm to the industry? YOUR ANSWER CORRECT ANSWER The ±rm is generating higher returns to owners than the industry. The ±rm is generating lower returns to owners than the industry. The ±rm should use more equity ±nancing. The ±rm should use less equity ±nancing. 16. What must have taken place for a ±rm to recognize revenue, in order for the ±rm to comply with the accrual accounting rules? YOUR ANSWER CORRECT ANSWER The ±rm must have been paid for the product. The product must have been delivered. The price of the product must have included sales tax. The price of the product must have been exempt from sales tax. Accessibility Policy Accessibility Settings

2/11/24, 4:29 PM WGU Student Portal https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/11147972/assessmentCode/PVCC/testDate/1707678554 5/18 17. A teacher won $100,000 and invests this money for ±ve years at an interest rate of 4% (compounded annually). How much will this teacher have in principal and interest at the end of the ±ve years? YOUR ANSWER CORRECT ANSWER $120,000 $121,551 $121,665 $125,000 18. An accountant is 40 years old and has an anticipated retirement age of 70 years old. The accountant plans to save $6,000 per year at the end of the next 30 years to fund retirement. How much will this accountant have upon retirement, if the accountant is able to earn 4% annually on this investment? YOUR ANSWER CORRECT ANSWER $180,000 $336,510 $349,970 $442,000 19. An investor deposits $2,000 per year (beginning today) for 10 years in a 4% interest-bearing account. The last cash ²ow is received one year prior to the end of the tenth year. What is this investor’s future balance after 10 years? YOUR ANSWER CORRECT ANSWER $24,012 $24,973 $26,012 $26,973 20. What is the par value (face value) of a bond? YOUR ANSWER CORRECT ANSWER The interest accrued on the bond through expiration The sum of money that the corporation promises to pay upon expiration of the bond The transaction costs associated with bond issuance The coupon yield of the bond 21. A broker is considering purchasing common stock in a company that has average but consistent operating performance. Accessibility Policy Accessibility Settings

2/11/24, 4:29 PM WGU Student Portal https://my.wgu.edu/coaching-report/preassessment-report/v1/studentPidm/11147972/assessmentCode/PVCC/testDate/1707678554 6/18 Which factor should lead this broker to purchase shares in this company? YOUR ANSWER CORRECT ANSWER A recent buying frenzy has driven the current price 50% higher than the previous trailing 12-month high price. The current price of the stock is 25% below its intrinsic value. The broker receives a tip that the company is about to announce a market breakthrough, and the price is above intrinsic value. Intrinsic value is 25% below the current stock price. 22. A broker is considering buying a dividend-paying stock. The dividend will be paid at the end of the year. The analyst consensus is the stock will be worth $36 in one year. The company pays a $2.25 annual dividend. (The ex-dividend date is not a consideration; the broker will receive the full $2.25.) The broker expects a 12% rate of return. What is the highest price this broker should be willing to pay for this stock? YOUR ANSWER CORRECT ANSWER $33.89 $34.01 $34.15 $38.25 23. A person buys shares of a company at $45 and recently paid a $2 annual dividend that is expected to grow by 10% per year. What is the expected return per year? YOUR ANSWER CORRECT ANSWER 12.2% 14.9% 15.7% 17.0% 24. The ±gure below represents the levels of market ef±ciency: Which investment option is less desirable for a prudent investor? Accessibility Policy Accessibility Settings

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