D076 OA UPDATED Actual Exam Questions and CORRECT Answers
2 views 0 purchase
Course
D076 OA
Institution
D076 OA
D076 OA UPDATED Actual Exam
Questions and CORRECT Answers
What does the term legal describe?
Encourage manipulation of accounting procedures to optimize the company's profit
Release managers who do not attempt to maximize immediate shareholder value
Set strict covenants that the company canno...
D076 OA UPDATED Actual Exam
Questions and CORRECT Answers
What does the term legal describe?
Encourage manipulation of accounting procedures to optimize the company's profit
Release managers who do not attempt to maximize immediate shareholder value
Set strict covenants that the company cannot uphold if it chooses a risky project
An action that is in accordance with the laws and rules set by an authority. - CORRECT
ANSWER- ✔✔An action that is in accordance with the laws and rules set by an authority.
What does high inventory turnover relative to the industry and competitors indicate?
Models are required by the SEC when a firm plans to issue additional stock on the public
market.
The firm holds too much inventory and its successful selling its good and services.
Models allow users to see the complex relationships between sales and other aspects of the
business.
The firm does not hold enough inventory and is making its customers wait longer to receive
their purchased goods. - CORRECT ANSWER- ✔✔The firm does not hold enough inventory
and is making its customers wait longer to receive their purchased goods.
What is the ratio that tells you on average how long it takes for a firm to collect accounts
receivable.
Average Benchmarking
Opportunity cost
Average collection period
Leading indicator - CORRECT ANSWER- ✔✔Average collection period
Three different names are used for interest rate for different purposes and perspectives:
,Discount rate, required rate, and cost of capital.
Required rate, correlated indicator, opportunity cost
Cost of capital, interest rate, and renew rate
required rate, discount method, cost of interest - CORRECT ANSWER- ✔✔Discount rate,
required rate, and cost of capital.
What is the main purpose of charging interest?
interest can be a good tool because it summarizes the required return, but it is a detriment
because it requires a larger cost of capital.
The higher risk an investor takes, the higher return the investor expects to receive.
Compounding interest can be a good tool to understand the time value of money, but it is a
detriment because it does not take inflation into account.
It allows borrowers to pay to use the assets of another entity to accomplish their own goals. -
CORRECT ANSWER- ✔✔It allows borrowers to pay to use the assets of another entity to
accomplish their own goals.
The required rate of return is also known as the BLANK in the context of corporate finance.
Inflation
Hurdle rate
Opportunity cost
Risk - CORRECT ANSWER- ✔✔Hurdle rate
The BLANK is the rate of return or compensation that an investor or lender will accept for
investments such as stocks, bonds, or loans.
Hurdle rate
Inflation
Opportunity cost
Required rate of return - CORRECT ANSWER- ✔✔Required rate of return
, BLANK Is the possibility that the realized or actual return will differ from the expected
return?
Hurdle rate.
Inflation
Opportunity cost
Risk - CORRECT ANSWER- ✔✔Risk
Which components of an interest rate is an indicator of inflation and opportunity cost?
Capital growth rate
Risk-free rate
Sustainable growth rate
Annual Percent of sales - CORRECT ANSWER- ✔✔Annual percentage rate
Why is the required rate of return also known as the hurdle rate?
It is simple and helps ensure that users do not spend more than the cash that they have
available.
It is the minimum rate that a firm must surpass to accept a project.
It enables users to connect bank and credit card accounts to automatically update income and
expenses.
It is the maximum rate that a firm must surpass to deny a project. - CORRECT ANSWER-
✔✔It is the minimum rate that a firm must surpass to accept a project.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller MGRADES. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
