PRINCIPLES OF FINANCE
C708 WGU EXAM QUESTIONS
WITH CORRECT ANSWERS 100%
2024
Retail securities firm - CORRECT ANSWERS-An individual decides to sell corporate
bonds to another investor. Which type of financial market or institution would be
involved in this transaction?
investment banking firm - CORRECT ANSWERS-A firm wants to sell new shares of
stock. Which other institution is involved in this type of transaction?
retail bank - CORRECT ANSWERS-A partnership needs funds to purchase technology
equipment. It will be able to repay those funds in under a year's time. Which
organization should the partnership contact to obtain the needed funds?
deposits - CORRECT ANSWERS-Which type of transactions do financial institutions
deal with?
commercial bank - CORRECT ANSWERS-What is considered a financial institution?
The investment manager publishes false investment performance reports in hopes of
convincing new investors to invest money. - CORRECT ANSWERS-Which situation is
unethical?
Collecting past-due accounts - CORRECT ANSWERS-The credit manager for a
company is responsible for setting the company's credit policy regarding availability and
limits for customers. What is one of the additional responsibilities of this credit
manager?
Ensuring sufficient financing is available - CORRECT ANSWERS-Which activity is
financial management responsible for?
Investments - CORRECT ANSWERS-What is one of the main areas of the financial
environment?
It generally operates with a high degree of uncertainty. - CORRECT ANSWERS-What is
a common challenge in the world of finance?
, The amount of debt and equity financing currently in use - CORRECT ANSWERS-
Which variable must be considered when a corporation's finance department is
determining the best strategy for financing a project?
Unlimited liability - CORRECT ANSWERS-An individual is interested in establishing a
lawn care business as a sole proprietorship. What will be a disadvantage of choosing
this business model?
The owner has uninterrupted control of the business. - CORRECT ANSWERS-What is
one benefit of a sole proprietorship?
Owners' personal assets are not protected against claims of creditors. - CORRECT
ANSWERS-What is a disadvantage of a general partnership?
Limited personal liability - CORRECT ANSWERS-What is one advantage of an LLC?
Corporate executives buying other companies to expand their influence - CORRECT
ANSWERS-What is an example of a potential principal-agent problem?
An account on the balance sheet and income statement that tends to vary when sales
are changed - CORRECT ANSWERS-What does a spontaneous account refer to?
13.76%
NI/S x S/A x A/E (1-b), where b = the dividend payout ratio (dividends/NI) - CORRECT
ANSWERS-A firm has a net income of $68.0 million and pays out $9.1 million in
dividends. The firm has total assets of $987 million and total liabilities of $559 million.
What is the firm's sustainable growth rate, given this information? Round your answer to
two decimal places.
Cross-sectional - CORRECT ANSWERS-Which type of data is collected by observing
many subjects at the same point in time?
The total of firm earnings that have been reinvested in the firm - CORRECT
ANSWERS-What does retained earnings on the balance sheet represent?
Inventory - CORRECT ANSWERS-Which account is a spontaneous account?
$8 million
22 - 11 - 3 = 8 - CORRECT ANSWERS-A firm has projected assets to be $22 million,
liabilities to be $11 million, and owner's equity to be $3 million. What is the discretionary
financing need?
Net change in assets minus the sum of the net change in liabilities and retained
earnings - CORRECT ANSWERS-How is discretionary financing calculated?
C708 WGU EXAM QUESTIONS
WITH CORRECT ANSWERS 100%
2024
Retail securities firm - CORRECT ANSWERS-An individual decides to sell corporate
bonds to another investor. Which type of financial market or institution would be
involved in this transaction?
investment banking firm - CORRECT ANSWERS-A firm wants to sell new shares of
stock. Which other institution is involved in this type of transaction?
retail bank - CORRECT ANSWERS-A partnership needs funds to purchase technology
equipment. It will be able to repay those funds in under a year's time. Which
organization should the partnership contact to obtain the needed funds?
deposits - CORRECT ANSWERS-Which type of transactions do financial institutions
deal with?
commercial bank - CORRECT ANSWERS-What is considered a financial institution?
The investment manager publishes false investment performance reports in hopes of
convincing new investors to invest money. - CORRECT ANSWERS-Which situation is
unethical?
Collecting past-due accounts - CORRECT ANSWERS-The credit manager for a
company is responsible for setting the company's credit policy regarding availability and
limits for customers. What is one of the additional responsibilities of this credit
manager?
Ensuring sufficient financing is available - CORRECT ANSWERS-Which activity is
financial management responsible for?
Investments - CORRECT ANSWERS-What is one of the main areas of the financial
environment?
It generally operates with a high degree of uncertainty. - CORRECT ANSWERS-What is
a common challenge in the world of finance?
, The amount of debt and equity financing currently in use - CORRECT ANSWERS-
Which variable must be considered when a corporation's finance department is
determining the best strategy for financing a project?
Unlimited liability - CORRECT ANSWERS-An individual is interested in establishing a
lawn care business as a sole proprietorship. What will be a disadvantage of choosing
this business model?
The owner has uninterrupted control of the business. - CORRECT ANSWERS-What is
one benefit of a sole proprietorship?
Owners' personal assets are not protected against claims of creditors. - CORRECT
ANSWERS-What is a disadvantage of a general partnership?
Limited personal liability - CORRECT ANSWERS-What is one advantage of an LLC?
Corporate executives buying other companies to expand their influence - CORRECT
ANSWERS-What is an example of a potential principal-agent problem?
An account on the balance sheet and income statement that tends to vary when sales
are changed - CORRECT ANSWERS-What does a spontaneous account refer to?
13.76%
NI/S x S/A x A/E (1-b), where b = the dividend payout ratio (dividends/NI) - CORRECT
ANSWERS-A firm has a net income of $68.0 million and pays out $9.1 million in
dividends. The firm has total assets of $987 million and total liabilities of $559 million.
What is the firm's sustainable growth rate, given this information? Round your answer to
two decimal places.
Cross-sectional - CORRECT ANSWERS-Which type of data is collected by observing
many subjects at the same point in time?
The total of firm earnings that have been reinvested in the firm - CORRECT
ANSWERS-What does retained earnings on the balance sheet represent?
Inventory - CORRECT ANSWERS-Which account is a spontaneous account?
$8 million
22 - 11 - 3 = 8 - CORRECT ANSWERS-A firm has projected assets to be $22 million,
liabilities to be $11 million, and owner's equity to be $3 million. What is the discretionary
financing need?
Net change in assets minus the sum of the net change in liabilities and retained
earnings - CORRECT ANSWERS-How is discretionary financing calculated?
