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Question 1
A Canadian company reports current assets of $480,000 and current liabilities of $300,000, of which inventory is $150,000. What is the company's quick (acid-test) ratio?
Correct Answer:
1.10
Question 2
Using the DuPont identity, a firm has a net profit margin of 8%, total asset turnover of 1.5, and an equity multiplier of 2.0. What is its return on equity (ROE)?
Correct Answer:
24%
Question 3
A company forecasts sales growth of 20% using the percent-of-sales method. Sales rise from $1,000,000 to $1,200,000. Spontaneous assets are 60% of sales and spontaneous liabilities are 15% of sales. What is the additional funds needed (AFN) before considering retained earnings?
Correct Answer:
$$90,000
Question 4
Which financial ratio best measures a company's ability to meet its long-term interest obligations from operating earnings?
Correct Answer:
Times interest earned (interest coverage)
Question 5
A firm has a cash conversion cycle objective and reports: days inventory outstanding 60, days sales outstanding 45, and days payable outstanding 30. What is its cash conversion cycle (CCC)?
Correct Answer:
75 days
Question 1
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About this Exam

Prepare with the CPA PEP Finance Elective Practice Questions - CPA Professional Education Program (PEP) - Finance Elective Exam practice quiz. This question bank includes 100 questions covering company, value, rate, cash, and cost. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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CPA PEP Finance Elective Practice Questions - CPA Professional Education Program (PEP) - Finance Elective Exam

This practice set contains 100 questions from the matching question bank and focuses on company, value, rate, cash, and cost. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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