C214 WGU EXAM CRAM QUESTIONS WITH
CORRECT ANSWERS 2025
PtQ-QcorrectQanswer-isQtheQsoldQprice
Pt-1Q-QcorrectQanswer-isQtheQboughtQprice
CFtQ-QcorrectQanswer-isQtheQcashQflowQ(couponsQforQbonds;QdividendsQforQstocks).
DollarQReturnsQ-QcorrectQanswer-=QPtQ-QPt-1Q+QCFt
CashQFlowQfromQInvestingQ(CFI)Q-QcorrectQanswer-=QChangeQinQNetQPP&EQ+QDepreciationQExpense
NetQPP&EQ-QcorrectQanswer-=QGrossQPP&EQ-QAccumulatedQDepreciation
WithQtheQassumptionQofQnoQassetQdisposals,QCFIQwillQbeQequalQtoQ-QcorrectQanswer-
1)QchangeQinQGrossQPP&EQorQ2)QChangeQinQNetQPP&EQplusQdepreciationQexpense.
DividendsQ-QcorrectQanswer-=Q(OldQREQ+QNetQIncome)Q-QNewQRE
ChangeQinQREQ-QcorrectQanswer-=QNIQ-dividends
CFFQ-QcorrectQanswer-=QchangeQinQnotesQpayableQ+QchangeQinQlong-termQdebtQ-
QdividendsQ(assumingQnoQotherQrelevantQchanges)
FCFFQ-QcorrectQanswer-=QEBITQ(1-taxQrate)Q+QDepreciationQ-QCAPEXQ-QIncreasesQinQNWC
EBITQ-QcorrectQanswer-=QEarningsQbeforeQinterestQandQtaxes
CAPEXQ-QcorrectQanswer-=QCapitalQexpenditureQonQPP&E;QfrequentlyQmeasuredQasQCFI
, NWCQ-QcorrectQanswer-=QNetQworkingQcapitalQ(currentQassetsQ-QcurrentQliabilities)Qchanges
FCFEQ-QcorrectQanswer-=QNIQ+QDepreciationQ-QCAPEXQ-QIncreasesQinQNWCQ+QIncreasesQinQDebt
TATQTotalQAssetQTurnoverQ=QSalesQ/QTotalQAssets:Q-QcorrectQanswer-
Literally,QthisQratioQmeasuresQhowQmanyQdollarsQinQsalesQtheQfirmQgeneratesQperQdollarQofQassets.
TATQofQthreeQindicatesQthatQforQ-QcorrectQanswer-everyQ$1QofQassets,QtheQfirmQisQgeneratingQ$3QinQsales.
TIEQTheQTimesQInterestQEarnedQRatioQ=QEBITQ/QInterestQExpense:Q-QcorrectQanswer-
OperatingQexpense/InterestQExpense
rQ-QcorrectQanswer-=QRealQRisk-FreeQRateQ+QInflationQ+QRiskQPremium
rQ=Q(definitionQforQTMV)Q-QcorrectQanswer-
NominalQdiscountQrateQ(note:QnominalQmeansQinflationQisQincluded)
RealQrisk-freeQrateQ-QcorrectQanswer-=QTheQrateQearnedQonQrisklessQinvestmentsQwithQ0%Qinflation
InflationQ-QcorrectQanswer-=QTheQannualQdecayQinQtheQpurchasingQpowerQofQmoney
RiskQpremiumQ-QcorrectQanswer-=QCompensationQforQbearingQtheQriskQofQaQparticularQinvestment
TVMQisQaQrelativelyQsimpleQconcept.QEssentially,QweQbringQtogetherQthreeQvariables:Q-QcorrectQanswer-
1)QamountQofQtheQcashQflows
2)QtheQtimingQofQtheQcashQflows
3)QtheQrateQatQwhichQtheQvalueQofQtheQcashQflowsQchangesQdueQtoQtheQpassageQofQtime.
CORRECT ANSWERS 2025
PtQ-QcorrectQanswer-isQtheQsoldQprice
Pt-1Q-QcorrectQanswer-isQtheQboughtQprice
CFtQ-QcorrectQanswer-isQtheQcashQflowQ(couponsQforQbonds;QdividendsQforQstocks).
DollarQReturnsQ-QcorrectQanswer-=QPtQ-QPt-1Q+QCFt
CashQFlowQfromQInvestingQ(CFI)Q-QcorrectQanswer-=QChangeQinQNetQPP&EQ+QDepreciationQExpense
NetQPP&EQ-QcorrectQanswer-=QGrossQPP&EQ-QAccumulatedQDepreciation
WithQtheQassumptionQofQnoQassetQdisposals,QCFIQwillQbeQequalQtoQ-QcorrectQanswer-
1)QchangeQinQGrossQPP&EQorQ2)QChangeQinQNetQPP&EQplusQdepreciationQexpense.
DividendsQ-QcorrectQanswer-=Q(OldQREQ+QNetQIncome)Q-QNewQRE
ChangeQinQREQ-QcorrectQanswer-=QNIQ-dividends
CFFQ-QcorrectQanswer-=QchangeQinQnotesQpayableQ+QchangeQinQlong-termQdebtQ-
QdividendsQ(assumingQnoQotherQrelevantQchanges)
FCFFQ-QcorrectQanswer-=QEBITQ(1-taxQrate)Q+QDepreciationQ-QCAPEXQ-QIncreasesQinQNWC
EBITQ-QcorrectQanswer-=QEarningsQbeforeQinterestQandQtaxes
CAPEXQ-QcorrectQanswer-=QCapitalQexpenditureQonQPP&E;QfrequentlyQmeasuredQasQCFI
, NWCQ-QcorrectQanswer-=QNetQworkingQcapitalQ(currentQassetsQ-QcurrentQliabilities)Qchanges
FCFEQ-QcorrectQanswer-=QNIQ+QDepreciationQ-QCAPEXQ-QIncreasesQinQNWCQ+QIncreasesQinQDebt
TATQTotalQAssetQTurnoverQ=QSalesQ/QTotalQAssets:Q-QcorrectQanswer-
Literally,QthisQratioQmeasuresQhowQmanyQdollarsQinQsalesQtheQfirmQgeneratesQperQdollarQofQassets.
TATQofQthreeQindicatesQthatQforQ-QcorrectQanswer-everyQ$1QofQassets,QtheQfirmQisQgeneratingQ$3QinQsales.
TIEQTheQTimesQInterestQEarnedQRatioQ=QEBITQ/QInterestQExpense:Q-QcorrectQanswer-
OperatingQexpense/InterestQExpense
rQ-QcorrectQanswer-=QRealQRisk-FreeQRateQ+QInflationQ+QRiskQPremium
rQ=Q(definitionQforQTMV)Q-QcorrectQanswer-
NominalQdiscountQrateQ(note:QnominalQmeansQinflationQisQincluded)
RealQrisk-freeQrateQ-QcorrectQanswer-=QTheQrateQearnedQonQrisklessQinvestmentsQwithQ0%Qinflation
InflationQ-QcorrectQanswer-=QTheQannualQdecayQinQtheQpurchasingQpowerQofQmoney
RiskQpremiumQ-QcorrectQanswer-=QCompensationQforQbearingQtheQriskQofQaQparticularQinvestment
TVMQisQaQrelativelyQsimpleQconcept.QEssentially,QweQbringQtogetherQthreeQvariables:Q-QcorrectQanswer-
1)QamountQofQtheQcashQflows
2)QtheQtimingQofQtheQcashQflows
3)QtheQrateQatQwhichQtheQvalueQofQtheQcashQflowsQchangesQdueQtoQtheQpassageQofQtime.