Page 1 of 194
WGU C708 PRINCIPLES OF FINANCE EXAM OBJECTIVE
ASSESSMENT EXAM
QUESTIONS AND DETAILED SOLUTIONS LATEST UPDATE
WGU C708 PRINCIPLES OF FINANCE OA EXAM
QUESTION: With the accompanying information on page 6, what is the correct times interest
earned?
a.) 1.50
b.) 2.05
c.) 2.91
d.) 3.59
e.) 6.99 - ANSWER-6.99
QUESTION: Match the following ratios with the appropriate ratio formulas.
Average collection period, fixed asset turnover, return on equity, inventory turnover, and quick
ratio.
a.) Sales/Fixed assets, COGS/Inventory, AR/Daily credit sales, Net income/Total equity, and
(Current assets - Inventory)/Current liabilities
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b.) (Current assets - Inventory)/Current liabilities, COGS/Inventory, Sales/Fixed Assets, Net
income/Total equity, and AR/Daily credit sales
c.) AR/Daily credit sales, Sales/Fixed assets, Net income/Total equity, COGS/Inventory, and
(Current assets - Inventory)/Current liabilities
d.) COGS/Inventory, AR/Daily credit sales, (Current assets - Inventory)/Current liabilities,
Sales/Fixed assets, and Net income/Total equity - ANSWER-Ar/Daily credit sales, Sales/Fixed
assets, Net income/Total equity, COGS/Inventory, and (Current assets - Inventory)/Current
liabilities
QUESTION: With the accompanying balance sheets on page 8, what was XYZ's quick ratio in
2012?
a.) 2.39
b.) 2.99
c.) 1.16
d.) 3.14 - ANSWER-2.39
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QUESTION: A company as sales of $132 million, net income of $24 million, a total asset
turnover of .84, and a leverage multiplier of 1.6.
Using the DuPont Formula, what is the company's return on equity? (Round your answer to two
decimal places.)
a.) 24.43%
b.) 18.18%
c.) 16.79 %
d.) 15.41% - ANSWER-24.43%
QUESTION: A company has sales of $56 million, net income of $19 million, a total asset
turnover of .98, and a leverage multiplier of 1.2.
Using the DuPont Formula, what is the company's return on equity? (Round your answer to two
decimal places.)
a.) 39.90%
b.) 41.20%
c.) 19.80%
d.) 32.50% - ANSWER-39.90%
3
, Page 4 of 194
A company has fixed assets of $509 million, total equity of $218 million, current liabilities of
$128 million, and long-term debt of $390 million.
What is the total for the company's current assets?
a.) $262 million
b.) $119 million
c.) $128 million
d.) $227 million - ANSWER-$227 million
QUESTION: A company has just reported sales of $557 million, costs of goods sold of $150
million, depreciation of $190 million and interest expense of $40.2 million.
What is the company's net income if the tax rate is 35%? (Round your answer to the nearest
decimal place.)
a.) $407.0 million
b.) $217.0 million
c.) $114.9 million
d.) $187.6 million - ANSWER-$114.9 million
4
WGU C708 PRINCIPLES OF FINANCE EXAM OBJECTIVE
ASSESSMENT EXAM
QUESTIONS AND DETAILED SOLUTIONS LATEST UPDATE
WGU C708 PRINCIPLES OF FINANCE OA EXAM
QUESTION: With the accompanying information on page 6, what is the correct times interest
earned?
a.) 1.50
b.) 2.05
c.) 2.91
d.) 3.59
e.) 6.99 - ANSWER-6.99
QUESTION: Match the following ratios with the appropriate ratio formulas.
Average collection period, fixed asset turnover, return on equity, inventory turnover, and quick
ratio.
a.) Sales/Fixed assets, COGS/Inventory, AR/Daily credit sales, Net income/Total equity, and
(Current assets - Inventory)/Current liabilities
1
,Page 2 of 194
b.) (Current assets - Inventory)/Current liabilities, COGS/Inventory, Sales/Fixed Assets, Net
income/Total equity, and AR/Daily credit sales
c.) AR/Daily credit sales, Sales/Fixed assets, Net income/Total equity, COGS/Inventory, and
(Current assets - Inventory)/Current liabilities
d.) COGS/Inventory, AR/Daily credit sales, (Current assets - Inventory)/Current liabilities,
Sales/Fixed assets, and Net income/Total equity - ANSWER-Ar/Daily credit sales, Sales/Fixed
assets, Net income/Total equity, COGS/Inventory, and (Current assets - Inventory)/Current
liabilities
QUESTION: With the accompanying balance sheets on page 8, what was XYZ's quick ratio in
2012?
a.) 2.39
b.) 2.99
c.) 1.16
d.) 3.14 - ANSWER-2.39
2
,Page 3 of 194
QUESTION: A company as sales of $132 million, net income of $24 million, a total asset
turnover of .84, and a leverage multiplier of 1.6.
Using the DuPont Formula, what is the company's return on equity? (Round your answer to two
decimal places.)
a.) 24.43%
b.) 18.18%
c.) 16.79 %
d.) 15.41% - ANSWER-24.43%
QUESTION: A company has sales of $56 million, net income of $19 million, a total asset
turnover of .98, and a leverage multiplier of 1.2.
Using the DuPont Formula, what is the company's return on equity? (Round your answer to two
decimal places.)
a.) 39.90%
b.) 41.20%
c.) 19.80%
d.) 32.50% - ANSWER-39.90%
3
, Page 4 of 194
A company has fixed assets of $509 million, total equity of $218 million, current liabilities of
$128 million, and long-term debt of $390 million.
What is the total for the company's current assets?
a.) $262 million
b.) $119 million
c.) $128 million
d.) $227 million - ANSWER-$227 million
QUESTION: A company has just reported sales of $557 million, costs of goods sold of $150
million, depreciation of $190 million and interest expense of $40.2 million.
What is the company's net income if the tax rate is 35%? (Round your answer to the nearest
decimal place.)
a.) $407.0 million
b.) $217.0 million
c.) $114.9 million
d.) $187.6 million - ANSWER-$114.9 million
4
