WGU C214 Financial Management Quiz Bank | 200+ Questions and Verified Answers| 100% Correct | 2023\/ 2024 Newly Updated<\/p>\n\n\n\n
WGU C214 Financial Management Quiz
Bank | 200+ Questions and Verified Answers|
100% Correct | 2023\/ 2024 Newly Updated
Q: What is the relationship between WACC and IRR?
a. Just 2 different numbers
b. IRR must exceed WACC to accept investment
c. WACC must exceed IRR to accept investment
d. WACC and IRR are the same thing
Answer:
b
Q: What is the relationship between NPV and IRR?
a. Both must exceed WACC to accept investment
b. If discount rate equals IRR, NPV is equal to zero.
c. NPV must exceed WACC to accept investment
d. If discount rate equals IRR, should accept investment
Answer:
b
Q: If a firm’s financial and operating leverage is high, what is the implication?
a. The firm is more profitable
b. Profits are more volatile as sales fluctuate
c. The firm is less profitable
d. The two leverages offset each other – – neutral impact
Answer:
b<\/p>\n\n\n\n
Q: If an industry, such as autos, has very high fixed costs and very cyclical sales, what is the
implication for financial leverage?
a. Use high financial leverage to offset high fixed costs
b. Use low financial leverage to offset high operating leverage
c. It has no implication at all
d. None of the above
Answer:
b
Q: The SGR measures:
a. Historical dividend growth rate
b. Sales growth rate
c. Potential sales growth with internal funding
d. None of the above
Answer:
c
Q: The SEC Securities & Exchange Commission requires public companies to do the
following:
a. File audited financial statements with SEC
b. Change CEOs on a regular basis
e. Regulates the Money Supply
d. Prohibits foreign bribery
Answer:
a
Q: 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<\/p>\n\n\n\n
Answer:
d
Q: If a company produces and sells a product only in the U.S., what international developments
may affect its sales?
a. Fluctuating exchange rates
b. Imports of competing products
c. Immigration policy
d. Inflation in Europe
Answer:
b
Q: The SEC requires the following to file audited financial statements:
a. All companies
b. All for-profit companies
c. All publicly-traded corporations
d. There is no such requirement
Answer:
c
Q: Which best describes conceptually the valuation of all financial assets in financial markets?
a. Based on opinions of Wall Street analysts
b. The NPV of anticipated cash flows
c. Based on the book value of assets and liabilities
d. None of the above
Answer:
b
Q: Which accurately describes an “efficient” market?
a. Prices are low
b. Prices do not fluctuate<\/p>\n\n\n\n
c. Deviations from “fair value” are quickly eliminated
d. “Hot stocks” are the best investment
Answer:
c
Q: If a firm’s goal is to maximize stockholder wealth, which would the firm avoid?
a. Stock buybacks
b. Risky long-term investments
c. Investments with negative NPV
d. Transparency in financial statements
Answer:
c
Q: If you wanted to evaluate a non-public company, what sources would you use?
a. The financial statements filed with the SEC
b. The latest stock price quoted in the Wall Street Journal
c. The PE of a comparable public company
d. The book value of equity in its balance sheet
Answer:
c
Q: Which section of the Statement of Cash Flows describes the production and sales of the
firm’s product?
a. Cash Flow Operations
b. Cash Flow Investing
c. Cash Flow Financing.
d. Cash Flow Securities
Answer:
a
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