WGU D076 OBJECTIVE ASSESSMENT FINANCE SKILLS
FOR MANAGERS NEWEST 2024 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
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?
a) real estate
b) financial institutions
c) investments
d) business finance - ANSWER: D. Business Finance
What is the primary difference between finance and accounting?
a) Accounting focuses on the future, while finance is generally backward-looking.
b) Finance focuses on the future, while accounting is generally backward-looking.
c) Finance provides financial data to decision makers, and accounting involves
making decisions using that data.
d) Accounting involves investing and forecasting, while finance summarizes a
company's financial information. - ANSWER: B. Finance focuses on the future while
accounting is generally backward-looking.
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns?
a) financial institutions
b) accounting
c) capital structure
d) investments - ANSWER: D. Investments
What is the primary goal of the financial manager of a firm?
a) to maximize owner's wealth
b) to minimize costs of the firm
c) to minimize the asset holdings of the firm
d) to maximize manager's utility - ANSWER: A. To maximize owner's wealth
What should be the main question a firm asks when considering any investment
decision?
a) What is the best investment in the stock market?
b) Will this investment help the company reduce costs?
c) Do the benefits of this investment outweigh the costs?
d) Will this investment add value to the firm? - ANSWER: C. Do the benefits of this
investment outweigh the costs
What is the primary aim of personal finance goals?
a) To create more wealth and returns on investments
b) To maximize satisfaction from products purchased and services obtained
,c) To maximize shareholders' utility by increasing a firm's value
d) To increase consumption of goods and services
Next - ANSWER: B. To maximize satisfaction from products purchased and services
obtained.
This is the schedule of payments on a loan showing the breakdown between interest
and principal repayments. (Payment stays the same, but amount applied to principal
increases.) - ANSWER: Amortization schedule
Which of the following securities have potentially the highest risk level?
a) mutual fund
b) bonds
c) gold
d) individual stocks - ANSWER: D. Individual stocks
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project?
a) making financial decisions
b) making investment decisions
c) making credit standard decisions
d) making inventory control decisions - ANSWER: A. Making financial decisions
Which financial career focuses on investing capital into firms whos shares are not
currently sold on any public stock exchange? - ANSWER: B. Private Equity
Which task does a financial manager perform when assessing the costs and benefits
of potential projects?
a) implementing financial policies
b) managing working capital
c) making financing decisions
d) making investment decisions - ANSWER: D. Making investment decisions
What tool can you use to understand your overall cashflows?
a) investing
b) saving
c) budgeting
d) setting financial goals - ANSWER: C. Budgetng
What is a reasonable alternative to keeping an emergency stash of cash?
a) investing in long-term bonds
b) investing in high-risk growth stocks
c) investing in a saving account
d) investing the money in a nicer car - ANSWER: C. Investing in a saving account
You want to buy a house, so you obtain a mortgage for which you can afford the
monthly payments. What process have you engaged in as part of your financial
decision-making?
,a) assessing
b) analyzing data
c) investing
d) financing - ANSWER: D. Financing
What are the three subspecialties of finance?
a) accounting, investing, insurance planning
b) corporate banking, private equity, insurance planning
c) utility, corporate banking, corporate finance
d) business finance, investment, financial institutions - ANSWER: D. Business finance,
investment, financial institutions
What area of finance involves deciding which assets to invest in to create wealth in
the future?
a) investment banking
b) financial institutions
c) organizational finance
d) investments - ANSWER: D. 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?
a) making an investment decision
b) making a financing decision
c) managing financial investments
d) managing working capital - ANSWER: B. Making a financing decision
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?
a) to minimize personal expenses
b) to maximize individual utility
c) to set priorities in personal finances
d) to make personal finances predictable - ANSWER: B. To maximize individual utility
Which professional works with individuals to help them achieve their financial goals?
a) corporate financial analyst
b) commercial banker
c) financial planner
d) private equity manager - ANSWER: C. Financial Planner
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. In this scenario, what is Omar doing?
a) assessing a financial goal
b) budgeting
c) investing to achieve a goal
d) financing a goal - ANSWER: D. Financing a goal
Which method of ratio analysis looks at a firm's performance over time?
a) cross-sectional analysis
b) trend analysis
c) progress measurement
d) focus - ANSWER: B. Trend analysis
You are a financial analyst of an investment bank and you are doing research on
equity. You are looking at a book publisher's financial ratios in comparison to its
competitors and the industry average. What is this an example of?
a) cross-sectional analysis
b) performance evaluation
c) trend analysis
d) progress measurement - ANSWER: A. Cross-sectional analysis
Which type of ratio are suppliers interested in?
a) liquidity ratios
b) financing ratios
c) market ratios
d) profitability ratios - ANSWER: A. Liquidity ratios
What is the ratio that tells you on average how long it takes for a firm to collect
accounts receivable?
a) accounts receivable turnover
b) average collection period
c) inventory turnover
d) fixed asset turnover - ANSWER: B. Accounts collection period (ACP)
What does a debt ratio of 40% indicate?
a) it indicates that 40% of assets are financed by equity.
b) it indicates that 40% of fixed assets are financed by debt.
c) it indicates that 40% of total debt is long-term liabilities.
d) it indicates that 40% of assets are financed by debt. - ANSWER: D. It indicates that
40% of assets are financed by debt.
What is operating margin useful for?
a) identifying how efficiently firms are using their assets to generate sales
b) comparing the profitability of firms with different capital structures
c) understanding production cost efficiency
FOR MANAGERS NEWEST 2024 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
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?
a) real estate
b) financial institutions
c) investments
d) business finance - ANSWER: D. Business Finance
What is the primary difference between finance and accounting?
a) Accounting focuses on the future, while finance is generally backward-looking.
b) Finance focuses on the future, while accounting is generally backward-looking.
c) Finance provides financial data to decision makers, and accounting involves
making decisions using that data.
d) Accounting involves investing and forecasting, while finance summarizes a
company's financial information. - ANSWER: B. Finance focuses on the future while
accounting is generally backward-looking.
Which subspecialty of finance primarily involves deciding which assets will create
more wealth and earn positive returns?
a) financial institutions
b) accounting
c) capital structure
d) investments - ANSWER: D. Investments
What is the primary goal of the financial manager of a firm?
a) to maximize owner's wealth
b) to minimize costs of the firm
c) to minimize the asset holdings of the firm
d) to maximize manager's utility - ANSWER: A. To maximize owner's wealth
What should be the main question a firm asks when considering any investment
decision?
a) What is the best investment in the stock market?
b) Will this investment help the company reduce costs?
c) Do the benefits of this investment outweigh the costs?
d) Will this investment add value to the firm? - ANSWER: C. Do the benefits of this
investment outweigh the costs
What is the primary aim of personal finance goals?
a) To create more wealth and returns on investments
b) To maximize satisfaction from products purchased and services obtained
,c) To maximize shareholders' utility by increasing a firm's value
d) To increase consumption of goods and services
Next - ANSWER: B. To maximize satisfaction from products purchased and services
obtained.
This is the schedule of payments on a loan showing the breakdown between interest
and principal repayments. (Payment stays the same, but amount applied to principal
increases.) - ANSWER: Amortization schedule
Which of the following securities have potentially the highest risk level?
a) mutual fund
b) bonds
c) gold
d) individual stocks - ANSWER: D. Individual stocks
Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project?
a) making financial decisions
b) making investment decisions
c) making credit standard decisions
d) making inventory control decisions - ANSWER: A. Making financial decisions
Which financial career focuses on investing capital into firms whos shares are not
currently sold on any public stock exchange? - ANSWER: B. Private Equity
Which task does a financial manager perform when assessing the costs and benefits
of potential projects?
a) implementing financial policies
b) managing working capital
c) making financing decisions
d) making investment decisions - ANSWER: D. Making investment decisions
What tool can you use to understand your overall cashflows?
a) investing
b) saving
c) budgeting
d) setting financial goals - ANSWER: C. Budgetng
What is a reasonable alternative to keeping an emergency stash of cash?
a) investing in long-term bonds
b) investing in high-risk growth stocks
c) investing in a saving account
d) investing the money in a nicer car - ANSWER: C. Investing in a saving account
You want to buy a house, so you obtain a mortgage for which you can afford the
monthly payments. What process have you engaged in as part of your financial
decision-making?
,a) assessing
b) analyzing data
c) investing
d) financing - ANSWER: D. Financing
What are the three subspecialties of finance?
a) accounting, investing, insurance planning
b) corporate banking, private equity, insurance planning
c) utility, corporate banking, corporate finance
d) business finance, investment, financial institutions - ANSWER: D. Business finance,
investment, financial institutions
What area of finance involves deciding which assets to invest in to create wealth in
the future?
a) investment banking
b) financial institutions
c) organizational finance
d) investments - ANSWER: D. 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?
a) making an investment decision
b) making a financing decision
c) managing financial investments
d) managing working capital - ANSWER: B. Making a financing decision
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?
a) to minimize personal expenses
b) to maximize individual utility
c) to set priorities in personal finances
d) to make personal finances predictable - ANSWER: B. To maximize individual utility
Which professional works with individuals to help them achieve their financial goals?
a) corporate financial analyst
b) commercial banker
c) financial planner
d) private equity manager - ANSWER: C. Financial Planner
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. In this scenario, what is Omar doing?
a) assessing a financial goal
b) budgeting
c) investing to achieve a goal
d) financing a goal - ANSWER: D. Financing a goal
Which method of ratio analysis looks at a firm's performance over time?
a) cross-sectional analysis
b) trend analysis
c) progress measurement
d) focus - ANSWER: B. Trend analysis
You are a financial analyst of an investment bank and you are doing research on
equity. You are looking at a book publisher's financial ratios in comparison to its
competitors and the industry average. What is this an example of?
a) cross-sectional analysis
b) performance evaluation
c) trend analysis
d) progress measurement - ANSWER: A. Cross-sectional analysis
Which type of ratio are suppliers interested in?
a) liquidity ratios
b) financing ratios
c) market ratios
d) profitability ratios - ANSWER: A. Liquidity ratios
What is the ratio that tells you on average how long it takes for a firm to collect
accounts receivable?
a) accounts receivable turnover
b) average collection period
c) inventory turnover
d) fixed asset turnover - ANSWER: B. Accounts collection period (ACP)
What does a debt ratio of 40% indicate?
a) it indicates that 40% of assets are financed by equity.
b) it indicates that 40% of fixed assets are financed by debt.
c) it indicates that 40% of total debt is long-term liabilities.
d) it indicates that 40% of assets are financed by debt. - ANSWER: D. It indicates that
40% of assets are financed by debt.
What is operating margin useful for?
a) identifying how efficiently firms are using their assets to generate sales
b) comparing the profitability of firms with different capital structures
c) understanding production cost efficiency
