WGU C214 Financial Management OA
Western Governors University
Financial Management 2026/2027
Academic Year
This is an original practice exam designed to help students review
concepts commonly covered in Financial Management courses,
including time value of money, capital budgeting, risk and return,
financial statement analysis, working capital management, cost of
capital, and valuation.
Question 1
What is the primary goal of financial management?
A. Maximize sales revenue
B. Maximize shareholder wealth
C. Minimize taxes only
D. Increase employee compensation
Correct Answer: B. Maximize shareholder wealth
Rationale: Financial management focuses on increasing the
value of the firm and maximizing owners' wealth.
,Question 2
The time value of money principle states that:
A. Money loses all value over time
B. A dollar today is worth more than a dollar received in the
future
C. Future money is always worth more
D. Inflation has no effect on value
Correct Answer: B. A dollar today is worth more than a dollar
received in the future
Rationale: Money available today can be invested and earn
returns.
Question 3
Which formula is used to calculate future value?
A. FV = PV × (1 + r)^n
B. FV = PV ÷ (1 + r)^n
C. FV = PV − r
D. FV = PV × r
, Correct Answer: A. FV = PV × (1 + r)^n
Rationale: Future value reflects compound growth over time.
Question 4
Present value is best described as:
A. Future cash flow adjusted to today's value
B. Current liabilities
C. Market capitalization
D. Net income
Correct Answer: A. Future cash flow adjusted to today's value
Rationale: Present value discounts future cash flows to today's
dollars.
Question 5
A project should generally be accepted if its net present value
(NPV) is:
A. Negative
B. Zero only
Western Governors University
Financial Management 2026/2027
Academic Year
This is an original practice exam designed to help students review
concepts commonly covered in Financial Management courses,
including time value of money, capital budgeting, risk and return,
financial statement analysis, working capital management, cost of
capital, and valuation.
Question 1
What is the primary goal of financial management?
A. Maximize sales revenue
B. Maximize shareholder wealth
C. Minimize taxes only
D. Increase employee compensation
Correct Answer: B. Maximize shareholder wealth
Rationale: Financial management focuses on increasing the
value of the firm and maximizing owners' wealth.
,Question 2
The time value of money principle states that:
A. Money loses all value over time
B. A dollar today is worth more than a dollar received in the
future
C. Future money is always worth more
D. Inflation has no effect on value
Correct Answer: B. A dollar today is worth more than a dollar
received in the future
Rationale: Money available today can be invested and earn
returns.
Question 3
Which formula is used to calculate future value?
A. FV = PV × (1 + r)^n
B. FV = PV ÷ (1 + r)^n
C. FV = PV − r
D. FV = PV × r
, Correct Answer: A. FV = PV × (1 + r)^n
Rationale: Future value reflects compound growth over time.
Question 4
Present value is best described as:
A. Future cash flow adjusted to today's value
B. Current liabilities
C. Market capitalization
D. Net income
Correct Answer: A. Future cash flow adjusted to today's value
Rationale: Present value discounts future cash flows to today's
dollars.
Question 5
A project should generally be accepted if its net present value
(NPV) is:
A. Negative
B. Zero only
