WGU D775
WGU D775- INTRODUCTION TO BUSINESS FINANCE EXAM GRADED A+
Accounts Receivable (A/R) Turnover - correct 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 - correct 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 - correct 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.
,WGU D775
Agency Costs - correct 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 - correct 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 - correct 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 - correct 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 - correct answer Resources owned by the company that have
economic value.
Auction Markets - correct 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.
, WGU D775
Average Collection Period - correct 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 - correct 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 - correct answer A financial statement that presents
a company's financial position at a specific point in time.
Bonds - correct 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 - correct answer Literal value or face value.
Business Finance - correct 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),
WGU D775- INTRODUCTION TO BUSINESS FINANCE EXAM GRADED A+
Accounts Receivable (A/R) Turnover - correct 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 - correct 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 - correct 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.
,WGU D775
Agency Costs - correct 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 - correct 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 - correct 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 - correct 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 - correct answer Resources owned by the company that have
economic value.
Auction Markets - correct 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.
, WGU D775
Average Collection Period - correct 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 - correct 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 - correct answer A financial statement that presents
a company's financial position at a specific point in time.
Bonds - correct 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 - correct answer Literal value or face value.
Business Finance - correct 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),
