100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
MBA Prep CFIN Fundamentals of Economics questions with correct $19.49   Add to cart
Quickly navigate to
Preview
  2.  
  3. ASU SHS 470
  4.  
  5. ASU SHS 470

Exam (elaborations)

MBA Prep CFIN Fundamentals of Economics questions with correct

1 review
 7 views  0 purchase
  • Course
  • ASU SHS 470
  • Institution
  • ASU SHS 470

MBA Prep CFIN Fundamentals of Economics questions with correct

Preview 3 out of 18  pages

Document information

  • May 30, 2024
  • 18
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

Subjects

  • mba prep cfin fundamentals of economics questions
  • mba prep cfin fundamentals of economics question
  • mba prep cfin fundamentals of economics questions

Written for

  • ASU SHS 470
  • ASU SHS 470

1  review

review-writer-avatar

By: Bestnursesteve • 1 month ago

Seller

avatar-seller
docwayne5

Reviews received

Content preview

MBA Prep CFIN Fundamentals of Economics questions with correct answers Analysts within a company are more likely to fall into the "false accuracy trap" when they develop pro formas than would external analysts because insiders have access to more detailed information - ✔✔ ANSW✔✔ True When making financial projections, if a particular expense item cannot be predicted with any degree of confidence, it should be forecast at the highest level it wou ld ever likely to reach, so as to make the pro formas conservative - ✔✔ ANSW✔✔ False The greater detail in a pro forma, the greater its accuracy will be - ✔✔ ANSW✔✔ False The qualitative portion of a financial analysis is analogous to the hypothesis -forming state of scientific investigation because - ✔✔ ANSW✔✔ assumptions not tested till numbers are run, false assumption may be formed, empirical measurement performed later During the qualitative portion of developing pro formas, - ✔✔ ANSW✔✔ industry -wide conside rations may be less important than company -specific issues An assumption is critical if - ✔✔ ANSW✔✔ it affections the bottom line greater than other assumptions, it reflects a judgement about the firm's ability to perform one of the keys to success Horizon tal and vertical percentage trends are useful in projecting future financial statements - ✔✔ ANSW✔✔ True In a stable, predictable industry, an average of the precious ten years' sales growth figures probably provides a more accurate forecast than assuming t he same level of sales next year as in the current year. - ✔✔ ANSW✔✔ True When performing sensitivity analysis - ✔✔ ANSW✔✔ statistical methods can be usefully employed, electronic spreadsheets can save time, assumptions should be changed one at a time The fi nal step in using pro formas is to - ✔✔ ANSW✔✔ Compare the results of the sensitivity analysis to the decision -maker's tolerance in the current situation The most accurate pro formas contain the most detail - ✔✔ ANSW✔✔ false In projecting an income statement based on a balance sheet, which of the following categories would you contend to be least likely to vary directly with a change in sales? - ✔✔ ANSW✔✔ Depreciation Hypothesis that are formed during the qualitative analysis can be verified when the analyst r eviews the firm's historical performance - ✔✔ ANSW✔✔ True Statistical methods can be employed to - ✔✔ ANSW✔✔ smooth out historical performance trends, aid the analyst in making estimates of future performance, establish boundaries for sensitivity analysis Sensitivity analysis should not be performed - ✔✔ ANSW✔✔ on a predictable, immaterial item If projected assets exceed liabilities and OE, it is assumed that the difference is funded through excess cash - ✔✔ ANSW✔✔ False What is the most compelling reason to project a firm's income statement before projecting its balance sheet? - ✔✔ ANSW✔✔ The change in retained earnings is determined by net income and dividend payments, working capital account balances are affected by sales levels When doing a comprehensive fi nancial forecast, which account warrants the most thorough relational and trend analysis? - ✔✔ ANSW✔✔ Sales The most significant difference between projecting balance sheets and projecting cash flow is that - ✔✔ ANSW✔✔ The cash flow statement shows the period ic increase or decrease in the plug figure Companies are concerned about shareholders' interests because - ✔✔ ANSW✔✔ firms like high share value, shareholders own the firm As long as owners perceive that managers are creating value in the firm, they are li kely to hold on to their shares - ✔✔ ANSW✔✔ True Value is created in a firm through - ✔✔ ANSW✔✔ Asset acquisition, which improve earnings or efficiencies, capitalization decisions, the reduction of operational and financial risks A firm's dividend policy can usually be established independently of its growth plans - ✔✔ ANSW✔✔ False Dividends are the sole source of returns for shareholders - ✔✔ ANSW✔✔ false It is likely that - ✔✔ ANSW✔✔ prudent managers have a detailed knowledge of the composition of their shareho lders and mixing asset purchase and financing decisions could cause managers to make poor decisions Financial risk - ✔✔ ANSW✔✔ is related to the amount of debit in a firm's capitalization Financial leverage raises a share's market value until - ✔✔ ANSW✔✔ financial risks outweighs the benefits

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

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

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

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 docwayne5. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $19.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

72799 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$19.49
  • (1)
  Add to cart