WGU D076 Finance Skills for Managers OA EXAM LATEST 2025 WITH
CORRECT QUESTIONS AND ANSWERS
1. Accounting The system of recording, reporting, and summarizing
past financial information and transactions.
2. Accounts Receivable Turnover (AR An activity ratio found by credit sales divided by ac-
Turnover) counts receivable.
3. Activity Ratios A category of ratios that measure how well a company
uses its assets to generate sales or cash, showing the
firm's operational eflciency and profitability.
4. Additional Funds Needed (AFN) Another name for the discretionary financing needed
or external financing needed. It represents the addi-
tional financing needed given a firm's expectations for
future growth.
5. Affirmative Covenants A bond covenant that describes things the company
pledges itself to do in order to protect bondholders.
6. Agency Costs Costs that are incurred when management does not act
in the best interest of shareholders.
7. Agency Problem When the agent (the management) does not act in the
best interest of the principle (the owners).
8. Aggressive Assets Companies or securities with beta greater than 1.
9. Annual Percentage Rate The annual interest rate that is charged for borrowing
money or that is earned through investment.
10. Annuity Due A series of equal payments made at the beginning of
consecutive periods.
11. Annuity A stream of cash flows of an equal amount paid every
consecutive period.
, WGU D076 Finance Skills for Managers OA EXAM LATEST 2025 WITH
CORRECT QUESTIONS AND ANSWERS
12. Asset Pricing The process of valuing assets.
13. Auction Market A secondary market with a physical location and where
prices are determined by investors' willingness to pay.
14. Average Collection Period (ACP) An activity ratio found by the number of days in a year
(365) divided by AR turnover.
15. Balance Sheet Forecasting Using sales growth and the profit forecast to construct
a pro forma balance sheet to understand the future
implications of the sources and uses of finances.
16. Banks and Credit Unions Receive deposits and extend loans to individuals and
businesses.
17. Benchmarking The process of completing a financial analysis to com-
pare a firm's financial performance to that of other
similar firms.
18. Beta A variable that describes how the price of a security
varies with the market.
19. Bid-ask Spread The ditterence between the bid and ask prices that
compensate the specialist for the risk that he or she
bears for willingness to provide liquidity.
20. Board of Directors A group of people who jointly supervise the activities of
an organization.
21. Bond Indenture A legal contract that governs the relationship between
a firm and its bondholders.
22. Bondholders
, WGU D076 Finance Skills for Managers
A person who loans a corporation money by buying
debt securities.
23. Business Finance An area of finance that deals with sources of funding,
the capital structure of corporations, the actions that
managers take to increase the value of the firm to its
owners, and the tools and analysis used to allocate
financial resources.
24. Cannibalization The reduction in sales of a company's own products
due to introduction of another similar product.
25. Capital Asset Pricing Model (CAPM) A model used to determine the risk-return relationship
for an asset.
26. Capital Budgeting Criteria Metrics and calculations used to determine whether
a project or asset will add value and be a worthwhile
investment.
27. Capital Budgeting The process of evaluation and planning for purchases
of long-term assets.
28. Capital Investment The sum of money invested in a business to purchase
long-term assets to further its objective of maximizing
owner wealth.
29. Capital Markets A type of financial market used for long-term assets that
are held for greater than one year.
30. Capital Structure The mixture of debt and equity used to finance a firm.
31. Capital A financial asset that can be used by a firm or individual.
Examples of capital may be machinery or cash held by
a firm.
, WGU D076 Finance Skills for Managers
32. Capital-constrained Environment When a limited amount of funds are available.
33. Cash Budgets A plan for controlling cash inflows and outflows busi-
ness to balance income with expenditures.
34. Cash Management Managing the day-to-day finance operations of a firm.
35. Central Banks Ensure that a nation's economy remains healthy by
controlling the amount of money circulating in the
economy.
36. Common Stock A type of stock that represents equity in a firm and
confers the right to vote at shareholder meetings.
37. Compounding Interest The interest on the principal plus the interest on earned
interest.
38. Compounding Finding a future value given a present value.
39. Corporate Bonds A debt instrument that is issued by a corporation in
order to raise capital.
40. Corporate Governance The system of rules, practices, and processes by which
a firm is directed and controlled.
41. Correlation The measure of the relationship between two variables
that move in relation to each other.
42. Cost of Capital The cost to a firm to use an investor's capital; see inter-
est rate.
43. Coupon Rate The stated interest rate of a bond; also known as
coupon yield.
CORRECT QUESTIONS AND ANSWERS
1. Accounting The system of recording, reporting, and summarizing
past financial information and transactions.
2. Accounts Receivable Turnover (AR An activity ratio found by credit sales divided by ac-
Turnover) counts receivable.
3. Activity Ratios A category of ratios that measure how well a company
uses its assets to generate sales or cash, showing the
firm's operational eflciency and profitability.
4. Additional Funds Needed (AFN) Another name for the discretionary financing needed
or external financing needed. It represents the addi-
tional financing needed given a firm's expectations for
future growth.
5. Affirmative Covenants A bond covenant that describes things the company
pledges itself to do in order to protect bondholders.
6. Agency Costs Costs that are incurred when management does not act
in the best interest of shareholders.
7. Agency Problem When the agent (the management) does not act in the
best interest of the principle (the owners).
8. Aggressive Assets Companies or securities with beta greater than 1.
9. Annual Percentage Rate The annual interest rate that is charged for borrowing
money or that is earned through investment.
10. Annuity Due A series of equal payments made at the beginning of
consecutive periods.
11. Annuity A stream of cash flows of an equal amount paid every
consecutive period.
, WGU D076 Finance Skills for Managers OA EXAM LATEST 2025 WITH
CORRECT QUESTIONS AND ANSWERS
12. Asset Pricing The process of valuing assets.
13. Auction Market A secondary market with a physical location and where
prices are determined by investors' willingness to pay.
14. Average Collection Period (ACP) An activity ratio found by the number of days in a year
(365) divided by AR turnover.
15. Balance Sheet Forecasting Using sales growth and the profit forecast to construct
a pro forma balance sheet to understand the future
implications of the sources and uses of finances.
16. Banks and Credit Unions Receive deposits and extend loans to individuals and
businesses.
17. Benchmarking The process of completing a financial analysis to com-
pare a firm's financial performance to that of other
similar firms.
18. Beta A variable that describes how the price of a security
varies with the market.
19. Bid-ask Spread The ditterence between the bid and ask prices that
compensate the specialist for the risk that he or she
bears for willingness to provide liquidity.
20. Board of Directors A group of people who jointly supervise the activities of
an organization.
21. Bond Indenture A legal contract that governs the relationship between
a firm and its bondholders.
22. Bondholders
, WGU D076 Finance Skills for Managers
A person who loans a corporation money by buying
debt securities.
23. Business Finance An area of finance that deals with sources of funding,
the capital structure of corporations, the actions that
managers take to increase the value of the firm to its
owners, and the tools and analysis used to allocate
financial resources.
24. Cannibalization The reduction in sales of a company's own products
due to introduction of another similar product.
25. Capital Asset Pricing Model (CAPM) A model used to determine the risk-return relationship
for an asset.
26. Capital Budgeting Criteria Metrics and calculations used to determine whether
a project or asset will add value and be a worthwhile
investment.
27. Capital Budgeting The process of evaluation and planning for purchases
of long-term assets.
28. Capital Investment The sum of money invested in a business to purchase
long-term assets to further its objective of maximizing
owner wealth.
29. Capital Markets A type of financial market used for long-term assets that
are held for greater than one year.
30. Capital Structure The mixture of debt and equity used to finance a firm.
31. Capital A financial asset that can be used by a firm or individual.
Examples of capital may be machinery or cash held by
a firm.
, WGU D076 Finance Skills for Managers
32. Capital-constrained Environment When a limited amount of funds are available.
33. Cash Budgets A plan for controlling cash inflows and outflows busi-
ness to balance income with expenditures.
34. Cash Management Managing the day-to-day finance operations of a firm.
35. Central Banks Ensure that a nation's economy remains healthy by
controlling the amount of money circulating in the
economy.
36. Common Stock A type of stock that represents equity in a firm and
confers the right to vote at shareholder meetings.
37. Compounding Interest The interest on the principal plus the interest on earned
interest.
38. Compounding Finding a future value given a present value.
39. Corporate Bonds A debt instrument that is issued by a corporation in
order to raise capital.
40. Corporate Governance The system of rules, practices, and processes by which
a firm is directed and controlled.
41. Correlation The measure of the relationship between two variables
that move in relation to each other.
42. Cost of Capital The cost to a firm to use an investor's capital; see inter-
est rate.
43. Coupon Rate The stated interest rate of a bond; also known as
coupon yield.
