WGU C214 OA Financial Management
Retake Exam
Questions and Answers
- What does the Foreign Corrupt Practices Act forbid U.S.
companies to do?
Prohibits U.S. firms and individuals from paying bribes to foreign officials to further
business deals. - What are two basic types of financial instruments?
Stocks and Bonds - What are secondary markets?
Secondary financial markets are where securities are traded after the
initial offering. - What do cash flows from operating activities report?
Operating – day to day operations
Investing – Property, plant, equipment, long
term items Financing – debt and equity
changes - What does the statement of cash flows report?
Cash inflow and cash outflow of business for period of time - Write the equation that links the income statement to the balance sheet?
New Re= Old RE + Net Income – dividends
7.
Net income 2,00
0
Depreciation 500
Change in operating assets 400
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Change in PPE 1,00
0
Change on long term
liabilities
600
Dividends paid 100
What is the firm’s cash flow from financing activities? CFF
Increase in debt 600 + (no change in stock) 0 – (dividends paid) 100 = 500
- Describe an income statement?
An income statement is a financial statement that shows you how profitable your
business was over a given reporting period. It shows your revenue, minus your
expenses and losses
Stuvia.com – The Marketplace to Buy and Sell your Study Material
the present value
for 10
of the architect’s investment?
years. The annual interest earned on the investment is 6%. What is
- An architect will receive $10,000 per year (at the end of the year) PMT
Stuvia.com – The Marketplace to Buy and Sell your Study Material - What item is included in the income statement and not included
in the statement of cash flows.
Depreciation - A company sold goods in 2016 for $30,000 and collected the cash in
- In 2016, the company incurred and paid $20,000 in expenses
related to the goods sold. How much income should the company report
in 2016 under the accrual basis of accounting?
30,000-20,000= $10,000 - 11.
EBIT: $1,000,000
Depreciation: $30,000
Changein working
capital($5,000) Net capital
expenditures: $10,000 Tax
rate: 40%
What is the company’s free cash flow?
1,000,000*(1-.40) + 30,000) – (-5,000) – 10,000 = 625,000 - Define Free Cash Flow?
Represents the cash available for the company to repay creditors or pay dividends and
interest to investor - A company reported an increase in accounts payable of $4,000
during the recent period. Half of this amount is expected to be paid
next period. What is the impact on the cash flow from operating
activities?
Increase of $4000
10,000 PMT (at the end of each
year) 6 I/Y
10 N
CPT PV = -7360008705 - An employee wants to retire 20 years from today and would like to have