WGU - D076 EXAM QUESTIONS AND CORRECT VERIFIED
ANSWERS.
You are a financial manager of a company. The marketing department has
informed you that the projected sales growth for the upcoming year is 10%. As
you conduct financial forecasting, you keep the long-term liabilities the same
amount as the previous year and will discuss this account with the other
managers later. What type of account is long-term liabilities? -
ANS✅✅Discretionary account - Discretionary accounts do not vary
automatically with sales but are left to the discretion of management. In this
scenario, you kept the long-term liabilities account the same.
What does the discretionary financing needed (DFN) tell us? - ANS✅✅The
total amount of funding that management will need to obtain through
discretionary financing sources - DFN is the difference between the projected
total assets and the projected total liabilities plus owners' equity. Any
discrepancy between the sources and uses of finance is extra financing that
management must obtain.
Company ABC would like to continue to grow, but in order to maintain control of
all decisions and ownership, it wants to avoid issuing new stock. Which
calculation will show the company's leadership the fastest that ABC can grow? -
ANS✅✅Sustainable growth rate -Sustainable growth rate is defined as the
rate at which a firm can grow without issuing new equity. It implies that the firm's
growth comes from the return on equity less any dividends.
,What is the major purpose of financial forecasting? - ANS✅✅To inform a
company how business decisions will impact future growth -Financial forecasting
helps decision makers understand how actions taken today can impact the firm's
future performance.
What is the name for a forecast of short-term events that helps a company
understand if it has sufficient cash? - ANS✅✅Cash budget - A cash budget is a
short-term forecast of future events that helps a company understand whether it
has sufficient cash for regular operations.
What area of finance involves deciding which assets to invest in to create wealth
in the future? - ANS✅✅Investments
Hannah is the financial manager of a firm. A project that she has recommended
has been approved and will cost $5 million. Since the company does not have
enough cash on reserve, Hannah must figure out how to raise enough money to
start the project. She can choose whether to issue new bonds, new stocks, a
mortgage loan, or some combination of those options. What task is Hannah
performing in this scenario? - ANS✅✅Making a financing decision - Since the
project has already been approved, Hannah is trying to find a way to finance the
investment and considering its capital structure.
0/1
Maria and Mateo are setting financial goals. They decide that they need to save
$200 each month to reach their goal of taking their children to visit their
grandparents in Spain next summer. What is the objective of setting such a goal?
- ANS✅✅To maximize individual utility -While everyone has different personal
financial goals, the objectives of such goals is to maximize individual utility.
, Which professional works with individuals to help them achieve their financial
goals? - ANS✅✅Financial planner - Professional financial planners work with
individuals to help them achieve their financial goals.
1/1
Omar is about to purchase a new car for $30,000. He knows he wants to buy the
car, but he is still trying to decide how to pay for it. He has barely over $30,000 in
his bank account. He can either take out an auto loan from a bank or use a mix of
cash and an auto loan. - ANS✅✅Financing a goal - He has already made a
decision to purchase the car and is now deciding on financing options.
Which area of finance deals with sources of funding and the capital structure of
corporations and seeks to increase the value of a firm to its owners? -
ANS✅✅Business finance - Business finance is the area of finance that deals
with uses and sources of funding to increase the value of the firm.
What is the primary difference between finance and accounting? -
ANS✅✅Finance focuses on the future, while accounting is generally
backward-looking. - finance is the management and allocation of capital with the
objectives of investing, forecasting, budgeting, saving, lending, and borrowing.
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - ANS✅✅Investments - investments is
the area of finance that seeks to create wealth in the future by deciding where to
allocate money
What is the primary goal of the financial manager of a firm? - ANS✅✅To
maximize owner wealth - The financial manager should make decisions based on
the primary goal of maximizing owner wealth.
ANSWERS.
You are a financial manager of a company. The marketing department has
informed you that the projected sales growth for the upcoming year is 10%. As
you conduct financial forecasting, you keep the long-term liabilities the same
amount as the previous year and will discuss this account with the other
managers later. What type of account is long-term liabilities? -
ANS✅✅Discretionary account - Discretionary accounts do not vary
automatically with sales but are left to the discretion of management. In this
scenario, you kept the long-term liabilities account the same.
What does the discretionary financing needed (DFN) tell us? - ANS✅✅The
total amount of funding that management will need to obtain through
discretionary financing sources - DFN is the difference between the projected
total assets and the projected total liabilities plus owners' equity. Any
discrepancy between the sources and uses of finance is extra financing that
management must obtain.
Company ABC would like to continue to grow, but in order to maintain control of
all decisions and ownership, it wants to avoid issuing new stock. Which
calculation will show the company's leadership the fastest that ABC can grow? -
ANS✅✅Sustainable growth rate -Sustainable growth rate is defined as the
rate at which a firm can grow without issuing new equity. It implies that the firm's
growth comes from the return on equity less any dividends.
,What is the major purpose of financial forecasting? - ANS✅✅To inform a
company how business decisions will impact future growth -Financial forecasting
helps decision makers understand how actions taken today can impact the firm's
future performance.
What is the name for a forecast of short-term events that helps a company
understand if it has sufficient cash? - ANS✅✅Cash budget - A cash budget is a
short-term forecast of future events that helps a company understand whether it
has sufficient cash for regular operations.
What area of finance involves deciding which assets to invest in to create wealth
in the future? - ANS✅✅Investments
Hannah is the financial manager of a firm. A project that she has recommended
has been approved and will cost $5 million. Since the company does not have
enough cash on reserve, Hannah must figure out how to raise enough money to
start the project. She can choose whether to issue new bonds, new stocks, a
mortgage loan, or some combination of those options. What task is Hannah
performing in this scenario? - ANS✅✅Making a financing decision - Since the
project has already been approved, Hannah is trying to find a way to finance the
investment and considering its capital structure.
0/1
Maria and Mateo are setting financial goals. They decide that they need to save
$200 each month to reach their goal of taking their children to visit their
grandparents in Spain next summer. What is the objective of setting such a goal?
- ANS✅✅To maximize individual utility -While everyone has different personal
financial goals, the objectives of such goals is to maximize individual utility.
, Which professional works with individuals to help them achieve their financial
goals? - ANS✅✅Financial planner - Professional financial planners work with
individuals to help them achieve their financial goals.
1/1
Omar is about to purchase a new car for $30,000. He knows he wants to buy the
car, but he is still trying to decide how to pay for it. He has barely over $30,000 in
his bank account. He can either take out an auto loan from a bank or use a mix of
cash and an auto loan. - ANS✅✅Financing a goal - He has already made a
decision to purchase the car and is now deciding on financing options.
Which area of finance deals with sources of funding and the capital structure of
corporations and seeks to increase the value of a firm to its owners? -
ANS✅✅Business finance - Business finance is the area of finance that deals
with uses and sources of funding to increase the value of the firm.
What is the primary difference between finance and accounting? -
ANS✅✅Finance focuses on the future, while accounting is generally
backward-looking. - finance is the management and allocation of capital with the
objectives of investing, forecasting, budgeting, saving, lending, and borrowing.
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns? - ANS✅✅Investments - investments is
the area of finance that seeks to create wealth in the future by deciding where to
allocate money
What is the primary goal of the financial manager of a firm? - ANS✅✅To
maximize owner wealth - The financial manager should make decisions based on
the primary goal of maximizing owner wealth.
