C214 Financial Management Overview Concept Quiz

C214 Financial Management Overview Concept Quiz Answers 4.5 (6 reviews) Students also studied Terms in this set (74) Western Governors UniversityC 214 Save WGU C214 Concepts Only Multi Cho...222 terms ctcaw259Preview WGU C214 Financial Mgmt Pass the ...Teacher 160 terms MBAStar317Preview WGU C214 Concepts Only Multi Cho...Teacher 222 terms Lydia_Smith75 Preview WGU C 69 terms Apo

1. The goal of the corporation is to:

• Maximize profits
• Maximize market share
• Maximize stock price
• Minimize risk
• Maximize stock price
• Risk premium is best described as
• Return on risky securities
• Compensation for risk-taking
• Return on stocks
• Expected return on securities
• Compensation for risk-taking
• What is the relationship between risk and required

return?

• The two are independent
• Higher required return causes lower risk
• Higher risk causes higher required return
• None of the above
• Higher risk causes higher required return
• The value of money depends upon
• The timing of the receipt
• The certainty of receipt
• The size of the receipt
• All of the above
• All of the above

• What is the purpose of the SEC 10-K filing

requirement?

• Promote transparency and efficiency
• Prevent insider trading
• Regulate sales practices
• Prevent monopolies
• Promote transparency and efficiency
• Which line item is not part of net working capital?
• Inventory
• Bonds
• Accounts Payable
• Accrued expenses
• Bonds
• Which action causes a cash outflow?
• Increase in accounts payable
• Decrease in accounts receivable
• Increase in inventory
• None of the above
• Increase in inventory
• Which of the following is correct?
• Gross PPE equals Net PPE plus depreciation expense
• Gross PPE equals Net PPE plus accumulated

depreciation

• Net PPE equals Gross PPE plus depreciation expense
• None of the above
• Net PPE equals Gross PPE plus depreciation expense

9. Net Margin is defined as:

• Net Income divided by sales
• EBIT divided by sales
• Dividends divided by net income
• Retained earnings divided by sales.
• Net Income divided by sales
• Which item is added to the balance sheet?
• Depreciation expense
• Dividends paid
• Addition to retained earnings
• Both a and c
• Both a and c
• What item is added to net income to calculate net cash

flow?

• Taxes
• Depreciation expense
• Dividends paid
• None of the above
• Depreciation expense
• Which represents cash earned by producing and

selling the product

• Cash flow operations
• Cash flow financing
• Cash flow investing
• None of the above
• Cash flow operations

• Which ratio reflects a firm's reliance on debt financing?
• Quick ratio
• Net Margin
• Financial leverage
• Asset turnover
• Financial leverage
• If two firms use different inventory valuation methods,

it is called:

• Timing issue
• Seasonal effect
• Cross industry effect
• Accounting difference
• Accounting difference
• What affects the required return on a security?
• Perceived riskiness of the security
• Degree of investor risk aversion
• Trading in financial markets
• All of the above
• All of the above
• Which is the most frequent type of transaction in

financial markets?

• IPO's
• Secondary market trades
• Primary market trades
• Venture capitalist trades
• Secondary market trades
• Which of the 5 white financial function keys represents

a series of cash disbursements?

• N
• PV
• I/Y
• PMT
• PMT
• If payments are made semi-annually, which key inputs

must be adjusted?

• PMT
• I/Y
• N
• All of the above
• All of the above
• Which can be defined as "change in value of cash over

time"?

• Interest rate
• Yield
• Expected return
• All of the above
• All of the above

• Which signifies a need to change the calculator to

Begin mode?

• Cash deposited at the beginning of the year
• Recurring payments made at the beginning of each

year

• Payments are made more frequently than annually
• None of the above
• Recurring payments made at the beginning of each year
• Why is an annuity due more valuable than an ordinary

annuity?

• Payments are received earlier
• Interest is compounded
• It is not more valuable; they are the same
• Use different interest rates.
• Payments are received earlier
• Which annuity provides increasing payments over

time?

• Annuity Due
• Ordinary Annuity
• Perpetual Annuity
• Perpetual Growth Annuity
• Perpetual Growth Annuity
• What causes uncertainty in financial decisions?
• GAAP changes
• Erroneous future projections
• Computer error
• Both b and c
• Erroneous future projections
• An increase in net working causes
• A cash inflow
• A cash outflow
• Does not affect cash flow
• Depends upon accrual accounting
• A cash outflow
• What feature distinguishes bonds from stock?
• Price determined in market trading
• Required cash payments to investors
• Mandatory redemption date
• Both b and c
• Both b and c
• Which bond feature is not a legal obligation?
• Face value
• Price
• Maturity Date
• Coupon Rate
• Price

28. Yield on a bond can best be described as:

• Interest received by the investor
• The coupon rate
• Rate of increase in value of investment
• Cash return to the investor
• Rate of increase in value of investment