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WGU C214 Financial Management Overview Concept Quiz Answers
1.1. The goal of the corporation is to
a.Maximize profits b.Maximize market share c.Maximize stock price d.Minimize risk ANS c. Maximize stock price
2.2. Risk premium is best described as
a.Return on risky securities b.Compensation for risk-taking c.Return on stocks d.Expected return on securities ANS b. Compensation for risk-taking
3.3. What is the relationship between risk and required return?
a.The two are independent 1 / 3
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b.Higher required return causes lower risk c.Higher risk causes higher required return d.None of the above ANS c. Higher risk causes higher required return
4.4. The value of money depends upon
a.The timing of the receipt b.The certainty of receipt c.The size of the receipt d.All of the above ANS d. All of the above
5.5. What is the purpose of the SEC 10-K filing requirement?
a.Promote transparency and efficiency b.Prevent insider trading c.Regulate sales practices d.Prevent monopolies ANS a. Promote transparency and efficiency
6.6. Which line item is not part of net working capital?
a.Inventory b.Bonds 2 / 3
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c.Accounts Payable d.Accrued expenses ANS b. Bonds
7.7. Which action causes a cash outflow?
a.Increase in accounts payable b.Decrease in accounts receivable c.Increase in inventory d.None of the above ANS c. Increase in inventory
8.8. Which of the following is correct?
a.Gross PPE equals Net PPE plus depreciation expense b.Gross PPE equals Net PPE plus accumulated depreciation
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