WGU C214 Financial Management Practice Exam 2026 | Complete Questions & Verified Answers

WGU C214 Financial Management – Practice Exam Exam (Latest
2026) Questions with Revised Answers, (A+ Guarantee) LATEST
UPDATE
Question 1

A company invests $10,000 at 6% annual interest for 5 years. What is the future value?
A) $12,500
B) $13,382
C) $13,000
D) $15,000

Answer: B) $13,382
Rationale: FV=10,000×(1+0.06)5=10,000×1.3382=13,382FV = 10,000 \times (1 + 0.06)^5 =
10,000 \times 1.3382 = 13,382FV=10,000×(1+0.06)5=10,000×1.3382=13,382



Question 2

Which ratio measures a company’s ability to meet short-term obligations?
A) Debt-to-Equity
B) Current Ratio
C) ROE
D) Inventory Turnover

Answer: B) Current Ratio
Rationale: Current ratio = Current Assets / Current Liabilities, showing liquidity.
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,Question 3

A project costs $50,000 and is expected to generate $60,000 in present value cash flows. What is
the NPV?
A) $10,000
B) $50,000
C) $60,000
D) -$10,000

Answer: A) $10,000
Rationale: NPV=PVinflows−PVoutflows=60,000−50,000=10,000NPV = PV_{\text{inflows}} -
PV_{\text{outflows}} = 60,000 - 50,000 = 10,000NPV=PVinflows−PVoutflows
=60,000−50,000=10,000



Question 4

If a firm’s beta is 1.2, the risk-free rate is 3%, and the expected market return is 8%, what is the
cost of equity?
A) 8%
B) 9%
C) 9.6%
D) 12%

Answer: C) 9.6%
Rationale: Ke=Rf+β(Rm−Rf)=3+1.2(8−3)=3+6=9.6%K_e = R_f + \beta(R_m - R_f) = 3 +
1.2(8-3) = 3 + 6 = 9.6\%Ke=Rf+β(Rm−Rf)=3+1.2(8−3)=3+6=9.6%



Question 5

Which of the following is not a working capital component?
A) Accounts Receivable
B) Inventory
C) Land
D) Accounts Payable

Answer: C) Land
Rationale: Land is a long-term asset, not part of current assets or liabilities.
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, 1. What is the future value of $5,000 invested for 3 years at 6% interest, compounded
annually?
A. $5,900
B. $5,970
C. $5,850
D. $5,955

Answer: D. $5,955
Rationale: FV = PV × (1 + r)^n → 5,000 × (1.06)^3 = 5,955

2. You deposit $1,000 today into an account earning 8% per year. What will it be worth in
5 years?
A. $1,469
B. $1,400
C. $1,500
D. $1,600

Answer: A. $1,469
Rationale: FV = 1,000 × (1.08)^5 ≈ 1,469

3. If you need $10,000 in 4 years at 5%, how much should you invest today?
A. $8,500
B. $8,230
C. $9,000
D. $8,700

Answer: B. $8,230
Rationale: PV = FV ÷ (1 + r)^n → 10,000 ÷ (1.05)^4 ≈ 8,230

4. Present value of $2,500 in 3 years at 6%?
A. $2,200
B. $2,100
C. $2,100.59
D. $2,150

Answer: C. $2,100.59
Rationale: PV = 2,500 ÷ (1.06)^3 ≈ 2,100.59

5. $3,000 invested 6 years at 7% compounded annually. Future value?
A. $4,000
B. $4,230
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C. $4,500
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D. $4,400

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