WGU D076 Finance Skills for Managers
Questions with Correct Answers
100% Verified Graded A+
1. What is a reasonable alternative to keeping an emergency stash of cash?-
Answer: Investing in a savings account
Investing in a readily withdrawable account that still earns some interest is a value-
preserving alternative.
2. Which area of finance deals with sources of funding and the capital struc- ture of
corporations and seeks to increase the value of a firm to its owners?
Answer: - Business finance is the area of finance that deals with uses and sources of funding
to increase the value of the firm.
3. What is the primary difference between finance and accounting?
Answer: Finance focuses on the future, while accounting is generally backward-looking.
4. Which subspecialty of finance primarily involves deciding which assets will create more
wealth and earn positive returns?
Answer: Investments is the area of finance that seeks to create wealth in the future by
,deciding where to allocate money.
5. What is the primary goal of the financial manager of a firm?
Answer: To maximize owner wealth.
The financial manager should make decisions based on the primary goal of maxi- mizing
owner wealth.
6. What should be the main question a firm asks when considering any invest- ment
decision?
Answer: Do the benefits of this investment outweigh the costs?
For any investment, you should expect to receive a benefit worth at least as much as the
initial cost.
7. What is the primary aim of personal finance goals?
Answer: To maximize satisfaction from products purchased and services obtained. The
objective of personal financial goals is to maximize one's utility.
8. Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project?
Answer: Making financing decisions.
The manager is deciding where to get the funds to support a new project, which means
the manager is making a financing decision.
,9. Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange?
Answer: Private equity deals with investments in firms that are privately held and whose
ownership is not yet bought or sold on any public stock exchange.
10. Which task does a financial manager perform when assessing the costs and benefits
of potential projects?
Answer: Making investment decisions
Managing working capital means overseeing day-to-day operations and cash flows.
11. What tool can you use to understand your overall personal cash flows?
Answer: - Budgeting helps you to understand your income and expenses and to analyze
your cash flows.
12. You want to buy a house, so you obtain a mortgage for which you can afford the
monthly payments. What process have you engaged in as part of your financial
decision-making?
Answer: Financing
Part of the personal finance process is figuring out how to finance your goals in a way that is
within your means
13. What area of finance involves deciding which assets to invest in to create wealth in
, the future?
Answer: Investments
Investments are an area of finance that involves deciding which assets to invest in to create
wealth in the future.
14. Hannah is the financial manager of a firm. A project that she has recom- mended has
been approved and will cost $5 million. Since the company does not have enough cash on
reserve, Hannah must figure out how to raise enough money to start the project. She can
choose whether to issue new bonds, new stocks, a mortgage loan, or some combination
of those options. What task is Hannah performing in this scenario?
Answer: Making a financing decision
Since the project has already been approved, Hannah is trying to find a way to finance the
investment and considering its capital structure.
15. Maria and Mateo are setting financial goals.They decide that they need to save $200
each month to reach their goal of taking their children to visit their grandparents in Spain
next summer. What is the objective of setting such a goal?
Answer: To maximize individual utility
While everyone has different personal financial goals, the objectives of such goals is to
maximize individual utility
Questions with Correct Answers
100% Verified Graded A+
1. What is a reasonable alternative to keeping an emergency stash of cash?-
Answer: Investing in a savings account
Investing in a readily withdrawable account that still earns some interest is a value-
preserving alternative.
2. Which area of finance deals with sources of funding and the capital struc- ture of
corporations and seeks to increase the value of a firm to its owners?
Answer: - Business finance is the area of finance that deals with uses and sources of funding
to increase the value of the firm.
3. What is the primary difference between finance and accounting?
Answer: Finance focuses on the future, while accounting is generally backward-looking.
4. Which subspecialty of finance primarily involves deciding which assets will create more
wealth and earn positive returns?
Answer: Investments is the area of finance that seeks to create wealth in the future by
,deciding where to allocate money.
5. What is the primary goal of the financial manager of a firm?
Answer: To maximize owner wealth.
The financial manager should make decisions based on the primary goal of maxi- mizing
owner wealth.
6. What should be the main question a firm asks when considering any invest- ment
decision?
Answer: Do the benefits of this investment outweigh the costs?
For any investment, you should expect to receive a benefit worth at least as much as the
initial cost.
7. What is the primary aim of personal finance goals?
Answer: To maximize satisfaction from products purchased and services obtained. The
objective of personal financial goals is to maximize one's utility.
8. Which task does a financial manager perform when choosing to obtain a loan to
purchase a piece of equipment for a new project?
Answer: Making financing decisions.
The manager is deciding where to get the funds to support a new project, which means
the manager is making a financing decision.
,9. Which financial career focuses on investing capital into firms whose shares are not
currently sold on any public stock exchange?
Answer: Private equity deals with investments in firms that are privately held and whose
ownership is not yet bought or sold on any public stock exchange.
10. Which task does a financial manager perform when assessing the costs and benefits
of potential projects?
Answer: Making investment decisions
Managing working capital means overseeing day-to-day operations and cash flows.
11. What tool can you use to understand your overall personal cash flows?
Answer: - Budgeting helps you to understand your income and expenses and to analyze
your cash flows.
12. You want to buy a house, so you obtain a mortgage for which you can afford the
monthly payments. What process have you engaged in as part of your financial
decision-making?
Answer: Financing
Part of the personal finance process is figuring out how to finance your goals in a way that is
within your means
13. What area of finance involves deciding which assets to invest in to create wealth in
, the future?
Answer: Investments
Investments are an area of finance that involves deciding which assets to invest in to create
wealth in the future.
14. Hannah is the financial manager of a firm. A project that she has recom- mended has
been approved and will cost $5 million. Since the company does not have enough cash on
reserve, Hannah must figure out how to raise enough money to start the project. She can
choose whether to issue new bonds, new stocks, a mortgage loan, or some combination
of those options. What task is Hannah performing in this scenario?
Answer: Making a financing decision
Since the project has already been approved, Hannah is trying to find a way to finance the
investment and considering its capital structure.
15. Maria and Mateo are setting financial goals.They decide that they need to save $200
each month to reach their goal of taking their children to visit their grandparents in Spain
next summer. What is the objective of setting such a goal?
Answer: To maximize individual utility
While everyone has different personal financial goals, the objectives of such goals is to
maximize individual utility
