WGU C214 Pre -Assement Financial

21 WGU C214 Pre -Assement Financial Management 1.How can a private firm appropriately maximize shareholder value?ANS By mak- ing decisions that keep the control of the business with the owners 2.Why are American regulators focused on international investing in a global marketplace?ANS Because international investing in a global marketplace is the con- cern of American investors 3.What is one of the two basic types of financial instruments?ANS Bonds 4.If a company outsources the manufacturing of its products to a foreign country, what are the likeliest outcomes?ANS Consumer prices will decrease and Domestic employment will de- 1 / 3

21 crease.

5.What is true about the content and structure of a balance sheet?ANS It reports the assets, liabilities, and equity at a point in time.

6.A company reported an increase in accounts receivable of $5,000 during the recent period. Half of this amount is expected to be collected next period.How will this change in accounts receivable affect the cash flows from the op- erating activities section?ANS The change will decrease cash flows from operations by $5,000.

7.Which statement accurately explains the recognition of revenues and ex- penses under accounting income and income for tax purposes?ANS Revenues and expenses may be recognized in one period for accounting income purposes and in a different period for income tax purposes.

8.Selected Data for 20x2 for ABD Inc. Netincome $ 1,000 Depreciation expense $ 300 2 / 3

21 Change in operating assets $ 600 Change in net property, plant, and equipment$ 5,000 Changes in long-term liabilities $ 1,000 Dividends paid $ 200 What is the firm's cash flow from investments, using the data above and assuming no asset disposals?ANS $5,300 outflow 9.What is the basic equation for a balance sheet?ANS Assets = Liabilities + Equity 10.What do cash flows from investing activities generally relate to?ANS A firm's purchase and sale of long-term assets