WGU C214 FINANCIAL MANAGEMENT PRE ASSESSMENT QUESTIONS & ANSWE… EXAM
P R O F E S S I O N A L P R A C T I C E M AT E R I A L S
WGU C214 Financial
Management Pre
Assessment Questions &
Answers 2026-2027
Verified Answers Exam Ready With Rationales
69 QUESTIONS
DOCUMENT OVERVIEW
This document provides 69 verified questions and their correct answers related to financial management,
ensuring comprehensive coverage of the subject area. It serves as an essential resource for students
preparing for exams, reviewing course materials, and obtaining certification in financial management. Each
question is designed to enhance understanding and retention, making it a valuable tool for effective study
and mastery of the content.
CONTENTS
Shareholder Value Q1–Q15
Financial Instruments Q16–Q30
Cash Flow and Capital Budgeting Q31–Q44
Investment Analysis Q45–Q58
Page 1
, Regulatory Compliance Q59–Q69
E XA M Q U EST I O N S
Q1 QUESTION 1 OF 69
How can a private firm appropriately maximize shareholder value?
CORRECT ANSWER
By making decisions that keep the control of the business with the owners
Q2 QUESTION 2 OF 69
Why are American regulators focused on international investing in a global marketplace?
CORRECT ANSWER
Because international investing in a global marketplace is the concern of
American investors
Q3 QUESTION 3 OF 69
If a company outsources the manufacturing of its products to a foreign country, what are the likeliest
outcomes?
CORRECT ANSWER
Consumer prices will decrease and Domestic employment will decrease.
Q4 QUESTION 4 OF 69
What is true about the content and structure of a balance sheet?
CORRECT ANSWER
It reports the assets, liabilities, and equity at a point in time.
Page 2
, Q5 QUESTION 5 OF 69
A company reported an increase in accounts receivable of $5,000 during the recent period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the operating activities section?
CORRECT ANSWER
The change will decrease cash flows from operations by $5,000.
Q6 QUESTION 6 OF 69
What does free cash flow represent?
CORRECT ANSWER
Cash available for distribution after funding required reinvestment
Q7 QUESTION 7 OF 69
A firm has a ROE (return on equity) of 0.27 and the industry average ROE is 0.24. Which conclusion would an
analyst draw when comparing the firm to the industry?
CORRECT ANSWER
The firm is generating higher returns to owners than the industry.
Q8 QUESTION 8 OF 69
What must have taken place for a firm to recognize revenue, in order for the firm to comply with the accrual
accounting rules?
CORRECT ANSWER
The product must have been delivered.
Q9 QUESTION 9 OF 69
Page 3
P R O F E S S I O N A L P R A C T I C E M AT E R I A L S
WGU C214 Financial
Management Pre
Assessment Questions &
Answers 2026-2027
Verified Answers Exam Ready With Rationales
69 QUESTIONS
DOCUMENT OVERVIEW
This document provides 69 verified questions and their correct answers related to financial management,
ensuring comprehensive coverage of the subject area. It serves as an essential resource for students
preparing for exams, reviewing course materials, and obtaining certification in financial management. Each
question is designed to enhance understanding and retention, making it a valuable tool for effective study
and mastery of the content.
CONTENTS
Shareholder Value Q1–Q15
Financial Instruments Q16–Q30
Cash Flow and Capital Budgeting Q31–Q44
Investment Analysis Q45–Q58
Page 1
, Regulatory Compliance Q59–Q69
E XA M Q U EST I O N S
Q1 QUESTION 1 OF 69
How can a private firm appropriately maximize shareholder value?
CORRECT ANSWER
By making decisions that keep the control of the business with the owners
Q2 QUESTION 2 OF 69
Why are American regulators focused on international investing in a global marketplace?
CORRECT ANSWER
Because international investing in a global marketplace is the concern of
American investors
Q3 QUESTION 3 OF 69
If a company outsources the manufacturing of its products to a foreign country, what are the likeliest
outcomes?
CORRECT ANSWER
Consumer prices will decrease and Domestic employment will decrease.
Q4 QUESTION 4 OF 69
What is true about the content and structure of a balance sheet?
CORRECT ANSWER
It reports the assets, liabilities, and equity at a point in time.
Page 2
, Q5 QUESTION 5 OF 69
A company reported an increase in accounts receivable of $5,000 during the recent period. Half of this
amount is expected to be collected next period.
How will this change in accounts receivable affect the cash flows from the operating activities section?
CORRECT ANSWER
The change will decrease cash flows from operations by $5,000.
Q6 QUESTION 6 OF 69
What does free cash flow represent?
CORRECT ANSWER
Cash available for distribution after funding required reinvestment
Q7 QUESTION 7 OF 69
A firm has a ROE (return on equity) of 0.27 and the industry average ROE is 0.24. Which conclusion would an
analyst draw when comparing the firm to the industry?
CORRECT ANSWER
The firm is generating higher returns to owners than the industry.
Q8 QUESTION 8 OF 69
What must have taken place for a firm to recognize revenue, in order for the firm to comply with the accrual
accounting rules?
CORRECT ANSWER
The product must have been delivered.
Q9 QUESTION 9 OF 69
Page 3
