WGU C214 EXAMINATION TEST 2026
QUESTIONS WITH ANSWERS GRADED A+
• Which cash flow measures the change in long term assets? Answer;
Cash flow investing
• Which financial ratios measure "efficiency"? Answer; Asset turnover
and Fixed Asset turnover
• Which ratio is the best measure of a firm's ability to pay bills? Answer;
Quick ratio
• Which decision requires using subjective estimates? Answer; Useful
(depreciable) life of a new asset
• What is the yield to maturity of a bond? Answer; The return earned
from purchase date to maturity
• If a bond pays $50 interest per year and yields 4%, what is its price?
Answer; Premium price; i.e. $50 interest = 5% coupon; if
Coupon>Yield, premium price
, • If a firm buys a 90-day Treasury bill, where is it carried on the balance
sheet? Answer; Current asset
• How does a "prudent investor" select investments? Answer; Seeks the
highest return for "reasonable" amount of risk
• What is added to net income to derive net cash flow? Answer;
Depreciation expense
• What is the difference between WACC and CAPM's required return?
Answer; CAPM includes only equity required return; WACC includes
debt & equity
• What do points on the Efficient Frontier measure? Answer; The
maximum return for a given level of risk; maximum Return-to-risk ratio
• What is Beta? Answer; Measure of volatility of a stock's risk relative to
the market
• Why are accurate forecasts important? Answer; Plan for resources to
support sales
QUESTIONS WITH ANSWERS GRADED A+
• Which cash flow measures the change in long term assets? Answer;
Cash flow investing
• Which financial ratios measure "efficiency"? Answer; Asset turnover
and Fixed Asset turnover
• Which ratio is the best measure of a firm's ability to pay bills? Answer;
Quick ratio
• Which decision requires using subjective estimates? Answer; Useful
(depreciable) life of a new asset
• What is the yield to maturity of a bond? Answer; The return earned
from purchase date to maturity
• If a bond pays $50 interest per year and yields 4%, what is its price?
Answer; Premium price; i.e. $50 interest = 5% coupon; if
Coupon>Yield, premium price
, • If a firm buys a 90-day Treasury bill, where is it carried on the balance
sheet? Answer; Current asset
• How does a "prudent investor" select investments? Answer; Seeks the
highest return for "reasonable" amount of risk
• What is added to net income to derive net cash flow? Answer;
Depreciation expense
• What is the difference between WACC and CAPM's required return?
Answer; CAPM includes only equity required return; WACC includes
debt & equity
• What do points on the Efficient Frontier measure? Answer; The
maximum return for a given level of risk; maximum Return-to-risk ratio
• What is Beta? Answer; Measure of volatility of a stock's risk relative to
the market
• Why are accurate forecasts important? Answer; Plan for resources to
support sales
