WGU D076 OBJECTIVE ASSESSMENT FINAL EXAM 2
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Terms in this set (112)
What area of finance involves deciding which Investments
assets to invest in to create wealth in the future?
Hannah is the financial manager of a firm. A Making a financing decision - Since the project has already been
project that she has recommended has been approved, Hannah is trying to find a way to finance the investment
approved and will cost $5 million. Since the and considering its capital structure.
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?
,0/1 To maximize individual utility -While everyone has different
Maria and Mateo are setting financial goals. personal financial goals, the objectives of such goals is to maximize
They decide that they need to save $200 each individual utility.
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?
Which professional works with individuals to Financial planner - Professional financial planners work with
help them achieve their financial goals? individuals to help them achieve their financial goals.
1/1 Financing a goal - He has already made a decision to purchase the
Omar is about to purchase a new car for car and is now deciding on financing options.
$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.
, Which area of finance deals with sources of Business finance - Business finance is the area of finance that deals
funding and the capital structure of with uses and sources of funding to increase the value of the firm.
corporations and seeks to increase the value of
a firm to its owners?
What is the primary difference between finance Finance focuses on the future, while accounting is generally
and accounting? backward-looking. - finance is the management and allocation of
capital with the objectives of investing, forecasting, budgeting,
saving, lending, and borrowing.
Which subspecialty of finance primarily involves Investments - investments is the area of finance that seeks to create
deciding which assets will create more wealth wealth in the future by deciding where to allocate money
and earn positive returns?
What is the primary goal of the financial To maximize owner wealth - The financial manager should make
manager of a firm? decisions based on the primary goal of maximizing owner wealth.
What should be the main question a firm asks Do the benefits of this investment outweigh the costs? - For any
when considering any investment decision? investment, you should expect to receive a benefit worth at least as
much as the initial cost.