WGU C214 OA FINANCIAL MANAGEMENT
RETAKE EXAM FULL QUESTIONS AND
ANSWERS 2026 GRADED A+
◉ A grocery store decides to offer beer for sale and this decision
results in more potato chip sales. This is an example of a synergistic
effect.
Question content area bottom
Part 1
True
Your answer is correct.
False. Answer: True
◉ Additional investment in working capital, even if it may be
recovered at the end of a project, must be included in capital
budgeting analysis because of the time value of money.
Question content area bottom
Part 1
True
Your answer is correct.
False. Answer: True
,◉ Sunk costs are cash outflows that will occur regardless of the
current accept/reject decision, and therefore should be excluded
from the analysis.
Question content area bottom
Part 1
True
Your answer is correct.
False. Answer: True
◉ Interest payments on a loan obtained specifically to fund a new
project should be considered an incremental cash flow for the new
project when determining the accept/reject decision.
Question content area bottom
Part 1
True
False. Answer: False
◉ Hershey's expects to sell $2 million of its new candy bar, although
$200,000 of this amount would have been spent on its existing
candy bar. The $2 million is the appropriate cash inflow for the new
candy bar project, while the $200,000 will be counted against the
return on the old candy bar.
Question content area bottom
Part 1
,True
False. Answer: False
◉ If a project uses an asset the corporation already owns, the cost of
that asset for capital budgeting purposes is zero to reflect the
advantage the project has over projects that require the purchase of
new assets.
Question content area bottom
Part 1
True
False. Answer: False
◉ An opportunity cost is a relevant incremental cost for capital
budgeting decisions.
True
Your answer is correct.
False. Answer: True
◉ The calculation of incremental free cash flows over a project's life
should include
A.
labor and material saving.
B.
, additional revenue.
C.
interest to bondholders.
D.
A and B.. Answer: D.
A and B.
◉ Tillamook Farms invests in a new kind of frozen dessert called
polar cream that becomes very popular. So many new customers
come to the store that the sales of existing ice cream products are
increased. The extra sales revenue
Question content area bottom
Part 1
A.
are synergistic effects that should be counted as incremental
revenues for the polar cream project.
Your answer is correct.
B.
should not be counted as incremental revenue for the polar cream
project because the sales come from existing products.
C.
are cannibalized sales that should be excluded from the analysis.
D.
RETAKE EXAM FULL QUESTIONS AND
ANSWERS 2026 GRADED A+
◉ A grocery store decides to offer beer for sale and this decision
results in more potato chip sales. This is an example of a synergistic
effect.
Question content area bottom
Part 1
True
Your answer is correct.
False. Answer: True
◉ Additional investment in working capital, even if it may be
recovered at the end of a project, must be included in capital
budgeting analysis because of the time value of money.
Question content area bottom
Part 1
True
Your answer is correct.
False. Answer: True
,◉ Sunk costs are cash outflows that will occur regardless of the
current accept/reject decision, and therefore should be excluded
from the analysis.
Question content area bottom
Part 1
True
Your answer is correct.
False. Answer: True
◉ Interest payments on a loan obtained specifically to fund a new
project should be considered an incremental cash flow for the new
project when determining the accept/reject decision.
Question content area bottom
Part 1
True
False. Answer: False
◉ Hershey's expects to sell $2 million of its new candy bar, although
$200,000 of this amount would have been spent on its existing
candy bar. The $2 million is the appropriate cash inflow for the new
candy bar project, while the $200,000 will be counted against the
return on the old candy bar.
Question content area bottom
Part 1
,True
False. Answer: False
◉ If a project uses an asset the corporation already owns, the cost of
that asset for capital budgeting purposes is zero to reflect the
advantage the project has over projects that require the purchase of
new assets.
Question content area bottom
Part 1
True
False. Answer: False
◉ An opportunity cost is a relevant incremental cost for capital
budgeting decisions.
True
Your answer is correct.
False. Answer: True
◉ The calculation of incremental free cash flows over a project's life
should include
A.
labor and material saving.
B.
, additional revenue.
C.
interest to bondholders.
D.
A and B.. Answer: D.
A and B.
◉ Tillamook Farms invests in a new kind of frozen dessert called
polar cream that becomes very popular. So many new customers
come to the store that the sales of existing ice cream products are
increased. The extra sales revenue
Question content area bottom
Part 1
A.
are synergistic effects that should be counted as incremental
revenues for the polar cream project.
Your answer is correct.
B.
should not be counted as incremental revenue for the polar cream
project because the sales come from existing products.
C.
are cannibalized sales that should be excluded from the analysis.
D.
