Wgu D775- Introduction to business
finance OBJECTIVE ASSESSMENT
2026 with questions and well
verified answers actual exam!!!
2026
Accounts Receivable (A/R) Turnover - ANSWER -A type of liquidity ratio that describes
the number of times a firm's accounts receivable account is paid off. Accounts Receivable
Turnover = Credit Sales ÷ Accounts Receivable.
Activity Ratios - ANSWER -A type of financial ratio that evaluates how efficiently a firm
utilizes its assets to generate sales or revenue; also known as efficiency ratios.
After-tax Cost of Debt - ANSWER -An adjustment of the before-tax cost of debt that
considers the tax deductions on interest expenses. It reflects the actual cost to a firm for debt
financing after benefiting from tax breaks.
Agency Costs - ANSWER -Costs that are incurred by the firm when management and
employees of a company do not act in the best interests of shareholders.
Agency Problem - ANSWER -A conflict of interest inherent in relationships where one
party is expected to act in another's best interests, such as between shareholders and
company management.
Annual Interest Rate - ANSWER -The annualized cost of borrowing or the yearly interest
rate charged on a loan or credit balance. Also known as annual percentage rate (APR).
, Annuity - ANSWER -A financial arrangement in which a series of equal payments is made
or received at regular intervals over a specified period of time.
Assets - ANSWER -Resources owned by the company that have economic value.
Auction Markets - ANSWER -Financial markets in which buyers and sellers submit
competitive bids and offers, with transactions occurring at prices that match the highest bid
with the lowest offer.
Average Collection Period - ANSWER -A type of liquidity ratio that calculates the average
number of days it takes for a company to collect its receivables. Average Collection Period =
Accounts Receivable ÷ Daily Credit Sales.
Before-tax Cost of Debt - ANSWER -The interest rate on loans or bonds. If a bank
provides an interest rate on a small business loan of 9.5%, then 9.5% is the before-tax cost of
debt.
Balance Sheet - ANSWER -A financial statement that presents a company's financial
position at a specific point in time.
Bonds - ANSWER -Debt securities issued by corporations or governments to raise
capital, where the issuer agrees to pay back the principal along with interest on specified
dates.
Book Value - ANSWER -Literal value or face value.
Business Finance - ANSWER -The area of the business in which 1) financial measures are
used to help management make decisions (ratio analysis), 2) financial analysts use
mathematical models to select what projects to invest in (capital budgeting), and 3) financial
analysts use the cost of capital to determine whether these projects should be financed with
either debt or equity, and which type of each.
Capital Appreciation - ANSWER -When a stock is bought at a lower price than what it is
sold. Subtracting the lower purchase price from the higher sales price is the appreciation.
finance OBJECTIVE ASSESSMENT
2026 with questions and well
verified answers actual exam!!!
2026
Accounts Receivable (A/R) Turnover - ANSWER -A type of liquidity ratio that describes
the number of times a firm's accounts receivable account is paid off. Accounts Receivable
Turnover = Credit Sales ÷ Accounts Receivable.
Activity Ratios - ANSWER -A type of financial ratio that evaluates how efficiently a firm
utilizes its assets to generate sales or revenue; also known as efficiency ratios.
After-tax Cost of Debt - ANSWER -An adjustment of the before-tax cost of debt that
considers the tax deductions on interest expenses. It reflects the actual cost to a firm for debt
financing after benefiting from tax breaks.
Agency Costs - ANSWER -Costs that are incurred by the firm when management and
employees of a company do not act in the best interests of shareholders.
Agency Problem - ANSWER -A conflict of interest inherent in relationships where one
party is expected to act in another's best interests, such as between shareholders and
company management.
Annual Interest Rate - ANSWER -The annualized cost of borrowing or the yearly interest
rate charged on a loan or credit balance. Also known as annual percentage rate (APR).
, Annuity - ANSWER -A financial arrangement in which a series of equal payments is made
or received at regular intervals over a specified period of time.
Assets - ANSWER -Resources owned by the company that have economic value.
Auction Markets - ANSWER -Financial markets in which buyers and sellers submit
competitive bids and offers, with transactions occurring at prices that match the highest bid
with the lowest offer.
Average Collection Period - ANSWER -A type of liquidity ratio that calculates the average
number of days it takes for a company to collect its receivables. Average Collection Period =
Accounts Receivable ÷ Daily Credit Sales.
Before-tax Cost of Debt - ANSWER -The interest rate on loans or bonds. If a bank
provides an interest rate on a small business loan of 9.5%, then 9.5% is the before-tax cost of
debt.
Balance Sheet - ANSWER -A financial statement that presents a company's financial
position at a specific point in time.
Bonds - ANSWER -Debt securities issued by corporations or governments to raise
capital, where the issuer agrees to pay back the principal along with interest on specified
dates.
Book Value - ANSWER -Literal value or face value.
Business Finance - ANSWER -The area of the business in which 1) financial measures are
used to help management make decisions (ratio analysis), 2) financial analysts use
mathematical models to select what projects to invest in (capital budgeting), and 3) financial
analysts use the cost of capital to determine whether these projects should be financed with
either debt or equity, and which type of each.
Capital Appreciation - ANSWER -When a stock is bought at a lower price than what it is
sold. Subtracting the lower purchase price from the higher sales price is the appreciation.
