CFA Institute CFA Level I Chartered Financial Analyst - CFA-Level-I Exam Practice Test

A firm using the LIFO inventory valuation method in an inflationary environment will have _________ profit margins and ________ inventory turnover compared to a firm using FIFO.

You expect to receive a series of annual payments forever. The present value of this series of payments is $575.00. If these payments can be invested at a rate of 13% per year, what is the amount of each cash flow?

Which of the following activities will decrease net working capital, all else equal? Assume the current ratio is greater than one.
I). selling of inventory at book value for cash.
II). increasing accounts payable.
III). selling marketable securities and using the proceeds to pay dividends.

An increase in price, all other things unchanged, leads to:

Of the following statements:
I). The level of significance of a hypothesis test is the probability of rejecting the null hypothesis when it is actually true.
II). Type II error is failing to reject the null hypothesis when it is actually false.

Forest Glen Furniture Company has the following ratios: Days accounts payable outstanding, 55; days inventory held, 50; days receivable outstanding, 65. Which one of the following is the correct number of days that cash inflows and outflows are mismatched (i.e. the cash cycle)?

Deductible temporary differences result in a deferred tax ______ when the tax base of an asset is
_ ____ than its carrying amount.

Select the correct statement(s) regarding sales of receivables:
I). An outright sale or securitization of accounts receivable transfers what would be future operating cash flow into the current period.
II). An outright sale or securitization of accounts receivable transfers current operating cash flow into future periods.
III). In the future, if a company sought to reduce the amount of receivables sold or securitized, operating cash flow would rise.
IV). Only an incremental amount of receivables sold would serve to increase operating cash flow.

What part of the annual report contains forward looking information?

Which statement is false?

Toward the top of the economic cycle, as final demand starts to fall off, ______ starts to occur abruptly.