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WGU Financial-Management Practice Q&A's

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WGU Financial-Management Exam Syllabus Topics:

SectionObjectives
Risk and Return- Expected return
- Portfolio risk and diversification
Capital Budgeting- Net present value (NPV)
- Payback period analysis
- Internal rate of return (IRR)
Cost of Capital and Valuation- Bond and stock valuation basics
- Weighted average cost of capital (WACC)
Financial Statement Analysis- Cash flow analysis
- Balance sheet and income statement interpretation
- Financial ratios
Time Value of Money- Present and future value calculations
- Annuities and perpetuities

WGU Financial Management VBC1 Sample Questions:

Question #1

In the statement of cash flows, how should an increase in accounts receivable be treated when calculating cash collected from customers?

  • A. It should be added to the cost of goods sold.
  • B. It should be subtracted from revenue.
  • C. It should be added to revenue.
  • D. It should be subtracted from cost of goods sold.
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Correct Answer: B  🗳️

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Question #2

How does country risk affect global financial management decisions?

  • A. It reduces the complexity of international investments.
  • B. It is typically considered irrelevant in financial planning since it is unpredictable.
  • C. It only affects firms with domestic operations facing international competition.
  • D. It necessitates strategies to mitigate potential losses from instability or unfavorable policies.
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Correct Answer: D  🗳️

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Question #3

How does the capital asset pricing model (CAPM) assist in investment decisions?

  • A. It focuses solely on dividend-paying stocks.
  • B. It helps in assessing the risk-return trade-off of a stock.
  • C. It guarantees a certain return on investments.
  • D. It predicts the exact future price of stocks.
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Correct Answer: B  🗳️

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Question #4

How does a competitive sale of bonds work?

  • A. The underwriter purchases bonds at a fixed rate determined by the government.
  • B. The underwriter is selected by the issuing firm based on a thorough interview process.
  • C. Underwriters submit bids, and the firm selects one based on price and interest rate.
  • D. Underwriters negotiate directly with the issuing firm on price and interest rate.
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Correct Answer: C  🗳️

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Question #5

What is a drawback of using the Gordon growth model for estimating the cost of common equity?

  • A. It requires extensive market data analysis.
  • B. It is too complex for general use.
  • C. It emphasizes short-term financial performance.
  • D. It applies only to companies with stable dividend policies.
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Correct Answer: D  🗳️

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