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WGU C214 Practice Test
1.1. A firm reported the following
Net Income 100,000 Depreciation 25,000 Change in NWC 15,000 What is the CFO (cash flow from operations)?a.100,000 b.110,000 c.120,000 d.(130,000) ANS CFO = Net Income + Depreciation - Increase NWC
=100,000 + 25,000 - 15,000
2.2. What is the Cash Flow from
Investing? Beginning Net PP&E 50,000 Ending Net PP&E 200,000 Depreciation Expense 40,000 1 / 4
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a.(190,000) b.150,000 c.200,000 d.(150,000) ANS Cash Flow Investing (CFI) Change in Investment = (Change in Net PPE + Depreciation)
=(200,000 - 50,000) + 40,000
Change Invest = 190,000 CFI = (-1) * Change in Invest = (190,000)
3.3. What is the Cash Flow from
Financing? Accounts Payable 50,000 Stock Issuance 75,000 Increase in Bonds Payable 125,000 Dividends Paid 80,000 a.150,000 b.120,000 c.100,000 d.145,000 ANS Cash Flow Financing 2 / 4
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CFF = Increase in Stock + Increase in Debt - Dividends Paid
=75,000+125,000-80,000
=120,000
4.4. A couple wants to save for a down payment on a house. They think they
need to accumlate 100,000 in five years. If the interest rate is 5% and they start 3 / 4
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at the end of the year when they both get bonuses from their employers, what do they have to put aside annually?a.22,096 b.17,752 c.18,097 d.18,462
ANS 100,000 FV
- N
- I/Y
Cpt PMT = 18,097
5.5. Hedgeco had sales of 70,000,000, expenses of 50,000,000 and has a
40% tax rate. It has equity of 40,000,000. The board approved dividends of 4,000,000. What is the company's Sustainable Growth Rate?a.20% b.15% c.25% d.14% ANS SGR = ROE * ( 1 - Payout Ratio
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