Principles of Finance WGU C708

The three main areas of finance are ____. - Answer- financial Institutions, financial markets, and financial management The two main drivers of finance are ____. - Answer- the time value of money and risk Investment - Answer- a placement of capital in expectation of deriving income or profit from its use. Asset - Answer- something or someone of any value; any portion of one's property or effects so considered. Debtor - Answer- a person or firm that owes money, one in debt, or one who owes a debt. The underlying driver behind all of finance is ____. - Answer- Time Finance is fundamentally a ____-looking field, while accounting is fundamentally a ___-looking field. - Answer- Forward; backward return - Answer- gain or loss from an investment. Leverage - Answer- the use of borrowed funds with a contractually determined return to increase the ability of a business to invest and earn an expected higher return (usually at high risk). Equity - Answer- Ownership, especially in terms of net monetary value, of a business shareholder - Answer- One who owns shares of stock Liability - Answer- an obligation, debt or responsibility owed to someone. dividends - Answer- a small payment to each person who owns a stock of a company Net Present Value - Answer- the present value of a project or an investment decision determined by summing the discounted incoming and outgoing future cash flows resulting from the decision. ______ managers perform data analysis and advise senior managers on profit-maximizing ideas. - Answer- Financial capital budgeting - Answer- Management must allocate limited resources between competing opportunities (projects) Finance - Answer- to provide or obtain funding for a transaction or undertaking; to back; to support. valuation - Answer- The process of estimating the market value of a financial asset or liability he primary goa