WGU C214 OA CERTIFICATION EVALUATION
TEST 2026 FULL QUESTIONS AND CORRECT
ANSWERS ALREADY PASSED GRADED A+
◉ Why would we reject a project based on IRR? Answer: The
discount rate is higher than the IRR
◉ What are two key elements of differential cash flow? Answer:
Depreciation expense and net income
◉ Why is the NPV preferred over the IRR? Answer: It measures the
dollar value and is more reliable.
◉ When a company uses more leverage as evidenced by a higher
degree of either financial or operating leverage, what effect does it
have on changes in profitability? Answer: Higher leverage leads to
higher profitability for a given sale level.
◉ What does the degree of financial leverage indicate? Answer: The
reliance on debt
◉ If a company has a high degree of financial leverage, what does
that tell us about the firms risk profile? Answer: Financial leverage
, also means that more financing is done through debt, not equity.
Higher profits to shareholders.
◉ What is the cash cycle? Answer: The amount of time to regenerate
cash.
◉ Why is float important to understand? Answer: To time cash
expenditures
◉ What should a company do to manage its working capital?
Answer: Collect quickly and pay slowly
◉ Name what characterizes increased collection float? Answer:
Increased float indicates slower processing time.
◉ In regards to Accounts Payable Balances, what is a good policy?
Answer: Paying off A/P on the last day due is a good policy.
◉ What would be a good source of information to determine
replacement cost? Answer: Building Appraisal
◉ Dodd-Frank Act regulates which segment of the U.S economy?
Answer: Banking industry
TEST 2026 FULL QUESTIONS AND CORRECT
ANSWERS ALREADY PASSED GRADED A+
◉ Why would we reject a project based on IRR? Answer: The
discount rate is higher than the IRR
◉ What are two key elements of differential cash flow? Answer:
Depreciation expense and net income
◉ Why is the NPV preferred over the IRR? Answer: It measures the
dollar value and is more reliable.
◉ When a company uses more leverage as evidenced by a higher
degree of either financial or operating leverage, what effect does it
have on changes in profitability? Answer: Higher leverage leads to
higher profitability for a given sale level.
◉ What does the degree of financial leverage indicate? Answer: The
reliance on debt
◉ If a company has a high degree of financial leverage, what does
that tell us about the firms risk profile? Answer: Financial leverage
, also means that more financing is done through debt, not equity.
Higher profits to shareholders.
◉ What is the cash cycle? Answer: The amount of time to regenerate
cash.
◉ Why is float important to understand? Answer: To time cash
expenditures
◉ What should a company do to manage its working capital?
Answer: Collect quickly and pay slowly
◉ Name what characterizes increased collection float? Answer:
Increased float indicates slower processing time.
◉ In regards to Accounts Payable Balances, what is a good policy?
Answer: Paying off A/P on the last day due is a good policy.
◉ What would be a good source of information to determine
replacement cost? Answer: Building Appraisal
◉ Dodd-Frank Act regulates which segment of the U.S economy?
Answer: Banking industry
