WGU - C214 Financial Management – Final QUESTIONS WITH CORRECT ANSWERS 2025

WGU - C214 Financial Management – Final QUESTIONS WITH
CORRECT ANSWERS 2025
StatementNofNCashNFlowsN-NCORRECTNANSWERN-
ShowsNtheNchangeNinNcashNbalanceNforNaNperiodNofNtime.NFocusesNonlyNonNitemsNwhereNcashNisNreceived,N
orNcashNisNpaid.



CashNFlowNfromNOperatingNActivitiesN(CFO)N-NCORRECTNANSWERN-
CashNflowNthatNaNcompanyNgeneratesNasNaNresultNofNday-to-
dayNbusinessNoperations.NDealsNwithNCurrentNAssetsNandNCurrentNLiabilities.



CashNFlowNfromNInvestingNActivitiesN(CFI)N-NCORRECTNANSWERN-
CashNflowNthatNisNgeneratedNfromNinvestmentsNinNlongNtermNassets.



CashNFlowNfromNFinancingNActivitiesN(CFF)N-NCORRECTNANSWERN-
CashNflowNthatNisNusedNtoNfundNtheNcompany.NCashNflowNthatNisNgeneratedNfromNfinancingNtheNbusiness.NI
ncludesNDebtN&NEquity.



HowNdoesNanNincreaseNinNAccountsNreceivableNimpactNCFO?N-NCORRECTNANSWERN-
AnNIncreaseNinNAccountsNreceivableNwillNdecreaseNCFO



HowNdoesNanNincreaseNinNAccountsNpayableNimpactNCFO?N-NCORRECTNANSWERN-
AnNIncreaseNinNAccountsNPayableNwillNincreaseNCFO



WhatNfinancialNstatementNisNpreparedNatNaNpointNinNtimeN-NCORRECTNANSWERN-BalanceNSheet



WhatNfinancialNstatementsNareNpreparedNforNaNperiodNofNtime?N-NCORRECTNANSWERN-·NIncomeNStatement

·NRetainedNEarningsNStatement

·NStatementNofNCashNFlows



DefineNEfficientNFrontierN-NCORRECTNANSWERN-MaximizesNexpectedNreturnNforNaNgivenNlevelNofNrisk



WhereNwouldNaNriskNaverseNinvestorNfallNonNtheNefficientNfrontier?N-NCORRECTNANSWERN-100%NBonds

, WhereNwouldNaNrisk-takingNinvestorNfallNonNtheNefficientNfrontier?N-NCORRECTNANSWERN-100%NStocks



WhatNisNaNBeta?N-NCORRECTNANSWERN-ANMeasureNofNRiskN-
NANBetaN1NisNtheNaverageNriskNofNallNstocks.NAnytimeNaNbetaNisNbelowN1,NitNisNlessNrisk.NIfNitNisNmoreNthanN1,N

itNisNhighNrisk.



DefineNefficientNmarketNhypothesisNasNitNrelatesNtoNaNfirm?N-NCORRECTNANSWERN-
ForNanyNcompanyNtoNsurvive,NtheyNneedNtoNmakeNprofitableNdecisions.NOtherwise,NinvestorsNwillNshunNthe
irNbusiness.NTheNfirmNneedsNtoNinvestNwhereNtheNreturnNisNmoreNthanNtheNcost.



WhatNisNtheNintrinsicNvalueNofNaNstockNunderNefficientNmarketNhypothesis?N-NCORRECTNANSWERN-
TheNintrinsicNvalueNofNstockNisNtheNpresentNvalueNofNtheNstock'sNafterNtaxNnetNcashNflows.



WheneverNtheNquestionNstatesNthatNdividendNwasNpaidNrecentlyNorNwasNjustNpaid,NwhatNmustNbeNcalculat
edNfirst?N-NCORRECTNANSWERN-ExpectedNDividend



ForNeveryNBondNquestion,NwhatNmustNbeNentered?N-NCORRECTNANSWERN-FVNmustNbeNenteredNasN1000

PMTNmustNbeNenteredNasN1000NxNCouponNRate



WhatNisNCapitalNBudgeting?N-NCORRECTNANSWERN-RefersNtoNlongNtermNinvestmentNdecisionNmaking.

RefersNtoNtheNprocessNusedNinNmakingNinvestmentNdecisionsNinvolvingNprojectsNthatNgenerateNcashNflowsN
overNaNmulti-yearNhorizon.



WhatNinformationNisNneededNforNcapitalNbudgeting?N-NCORRECTNANSWERN-InitialNOutlay

(HowNmuchNmoneyNtheNcompanyNisNgoingNtoNinvestNinNtheNcompanyNrightNnow)

DifferentialNAnnualNCashNFlows

(CashNflowNthatNtheNprojectNwillNgenerateNyearNafterNyear)

TerminalNCashNFlow

(CashNflowNgeneratedNatNtheNendNofNtheNproject)