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WGU C214 FINANCIAL MANAGEMENT PRE-
ASSESSMENT 2026
EXAM COMPLETE (69) CURRENT TESTING
QUESTIONS AND DETAILED CORRECT
ANSWERS (VERIFIED) TOP-RATED A+.
WGU C214
Prepare for your WGU C214 Financial Management Pre-
Assessment Exam with this focused study guide designed for
students at Western Governors University. It covers foundational
financial management concepts, including budgeting, capital
budgeting, risk and return, financial statements, and investment
analysis. Emphasizes analytical thinking, problem-solving, and
application of financial principles. Suitable for students
preparing for the C214 pre-assessment in financial
management.
What is the tax implication on the sale of the new machine at
Year 5? ✓ ✓...... ANSWER ....... Tax liabilities of $17,000
What is the acceptance criteria when using internal rate of
return to evaluate a project? ✓ ✓...... ANSWER .......
, Page 2 of 20
Accept when the project return is greater than the required
return.
A company would like to invest in a capital budget project
that will be worth $500,000 in 40 years.
How much should the company investtoday, assuming an
average inflation rate of 2% and a 10% annual
return? ✓ ✓...... ANSWER ....... $24,393
A company has a market value of $500 million.
It has a market value of equity of $200 million, a market
value of long-term debt of $150 million, and a
market value of short-term debt of $150 million.
The cost of equity is 12%,the cost of long-term debtis 8%,
and the cost of short-term debtis 6%. The
marginal tax rate is 35%.
What is the weighted average pre-tax cost of capital (WACC)
for this company? ✓ ✓...... ANSWER ....... 9.00%
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What advantage does the capital asset pricing model
(CAPM) have over the Gordon growth model? ✓ ✓......
ANSWER ....... CAPM considers risk of a stock relative to
the market to determine expected
return.
Why do companies strive for a lower cost of capital? ✓
✓...... ANSWER ....... Less money dedicated to financing
means more money is available for production and
operations.
A corporation established its projected sales at $210 million.
Itis using its current year balance sheet as a
basis for creating a pro forma balance sheet. They estimate
cash will be 7% of projected sales, accounts
receivable will be 19% of projected sales, and PP&E will be
55% of projected sales. Accounts payable are
estimated to be 12% of projected sales. Owners' equity is
$34 million. Long-term debtis $90 million.
Additionally,the firm raised $12.9 million of equity capital.
WGU C214 FINANCIAL MANAGEMENT PRE-
ASSESSMENT 2026
EXAM COMPLETE (69) CURRENT TESTING
QUESTIONS AND DETAILED CORRECT
ANSWERS (VERIFIED) TOP-RATED A+.
WGU C214
Prepare for your WGU C214 Financial Management Pre-
Assessment Exam with this focused study guide designed for
students at Western Governors University. It covers foundational
financial management concepts, including budgeting, capital
budgeting, risk and return, financial statements, and investment
analysis. Emphasizes analytical thinking, problem-solving, and
application of financial principles. Suitable for students
preparing for the C214 pre-assessment in financial
management.
What is the tax implication on the sale of the new machine at
Year 5? ✓ ✓...... ANSWER ....... Tax liabilities of $17,000
What is the acceptance criteria when using internal rate of
return to evaluate a project? ✓ ✓...... ANSWER .......
, Page 2 of 20
Accept when the project return is greater than the required
return.
A company would like to invest in a capital budget project
that will be worth $500,000 in 40 years.
How much should the company investtoday, assuming an
average inflation rate of 2% and a 10% annual
return? ✓ ✓...... ANSWER ....... $24,393
A company has a market value of $500 million.
It has a market value of equity of $200 million, a market
value of long-term debt of $150 million, and a
market value of short-term debt of $150 million.
The cost of equity is 12%,the cost of long-term debtis 8%,
and the cost of short-term debtis 6%. The
marginal tax rate is 35%.
What is the weighted average pre-tax cost of capital (WACC)
for this company? ✓ ✓...... ANSWER ....... 9.00%
, Page 3 of 20
What advantage does the capital asset pricing model
(CAPM) have over the Gordon growth model? ✓ ✓......
ANSWER ....... CAPM considers risk of a stock relative to
the market to determine expected
return.
Why do companies strive for a lower cost of capital? ✓
✓...... ANSWER ....... Less money dedicated to financing
means more money is available for production and
operations.
A corporation established its projected sales at $210 million.
Itis using its current year balance sheet as a
basis for creating a pro forma balance sheet. They estimate
cash will be 7% of projected sales, accounts
receivable will be 19% of projected sales, and PP&E will be
55% of projected sales. Accounts payable are
estimated to be 12% of projected sales. Owners' equity is
$34 million. Long-term debtis $90 million.
Additionally,the firm raised $12.9 million of equity capital.
