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Sophia Principles of Finance Unit 1 Challenge 4 1 — Financial Forecasting The process of applying sales goals to production in order to maximize efficiency is __________. capacity planning 2 — Forecasting the Income Statement Robyn wants to prepare a pro forma income statement for her business. What must she predict before forecasting her expenses? Sales 3 — Forecasting the Balance Sheet The pro forma balance sheet is prepared to ensure that the company's projected performance ...

Consider the P/E ratios of the following companies: Company A: 5.34 Company B: 3.33 10/13/2020 Sophia :: Welcome Company C: 7.90 Company D: 6.75 Which company has the lowest relative value among investors? Company B Company A Company C Company D CONCEPT Market Value Ratios 5 The purpose of a pro forma balance sheet is to __________. analyze the effects of a sales forecast analyze historical data compare previous accounting periods prepare for a financial audit CONCEPT Foreca...

Sophia Principles of Finance Unit 2 Challenge 1 1 — Introduction to the Time Value of Money In relation to the time value of money, what is interest? The cost of not having money today 2 — Future Value, Single Cash Flows You invest $800 in a scheme that guarantees a return of 9% simple interest annually. What is the value of your $800 in three years? $1,016 3 — Present Value, Single Cash Flows What is the present value of a $10,000 payment you will receive in one year, assuming ...

Sophia Principles of Finance Unit 3 Challenge 2 1 — The Security Markets A clothing company with a subscription business model is seeking to raise capital to expand its operation. They decide to issue a small number of shares to some high-net-worth individuals that have supported the company in the past. What type of market transaction is taking place? Private placement 2 — Understanding Returns Erin purchased stock with an initial share price of $15, and sold it when the share price...

Sophia Principles of Finance Unit 3 Challenge 3 1 — The Basics of the Cost of Capital What is the weighted average cost of capital (WACC)? The combination of interest rates being incurred from both debt and equity. 2 — Valuing Different Costs Using the following variables, calculate an organization's cost of debt on a $100,000 bond. Rf: 2% Credit-risk rate: 6% t: 20% $6,400 3 — Approaches to Calculating the Cost of Capital The bond yield plus risk premium (BYPRP) approach is ...

Sophia Principles of Finance Unit 3 Challenge 4 1 — Capital Structure Considerations One reason a company's capital structure may include more equity than debt is that relying too heavily on debt could __________. increase the company's risk of bankruptcy 2 — Understanding the Bankruptcy Process Select the true statement about Chapter 11 bankruptcy. Under Chapter 11, a company may be able to continue its operations, but with a potentially higher cost of capital. 3 — Thinking Abo...

Sophia Principles of Finance Unit 4 Challenge 1 1 — Introduction to Capital Budgeting Theoretically, a company comparing multiple long-term projects would select to invest in those with __________ payback period. the briefest 2 — The Payback Method A company is considering investing $35,000 in a project with the following anticipated net cash flows: Year 1: $10,000 Year 2: $7,000 Year 3: $6,000 Year 4: $11,000 Year 5: $15,000 Year 6: $8,000 In what year will payback occur? Yea...

1 — Types of Financing Which of the following types of financing is typical for a business in its growth stage? Equity from an IPO 2 — Venture Capital Which of the following is a disadvantage of venture capital? Companies that receive venture capital are more closely monitored by investors than they might otherwise be. 3 — Leasing Determine whether the following statement is true of a capital lease, an operating lease, neither or both. "A commercial financing agreement in which th...

Sophia Principles of Finance Unit 4 Challenge 3 1 — Working Capital What can a business that has too much working capital do to reduce it? Relax its customer credit policy 2 — Working Capital Financing Which of the following is a goal of working capital management? To meet day to day expenses while minimizing the cost of holding cash 3 —

Which of the following is the main reason the project completion celebration may not occur? Projects get extended due to outstanding issues. Project sponsor has begun work on a new project. Availability of the project reserves determines if a celebration occurs. Team members have begun work on a new project. CONCEPT Celebrating Project Completion 2 In which of the following ways is assessing project impact different from assessing project readiness? Project impact focuses more on the pr...