4/14/25, 5:54 AM WGU D076 Finance Skills for Managers
WGU D076 OA V5
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107 Correct terms
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4/14/25, 5:54 AM WGU D076 Finance Skills for Managers
- Financial institutions
4.Investments
What is the name for a series of equal payments made at the end of consecutive periods over a fixed length of time?
- Annuity due
- Ordinary annuity
- Single sum
4.Perpetuity
What is the major purpose of financial forecasting?
- To produce a short-term budget for a company or individual
- to show the company's growth over the past several years
- To make operational changes within a company
- To inform a company how business decisions will impact future growth
What is the name for a forecast of short-term events that helps a company understand if it has sufficient cash?
- Percent of sales forecast
- Cash budget
- Sustainable growth rate
- Time value of money
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4/14/25, 5:54 AM WGU D076 Finance Skills for Managers
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Term
Which description below correctly identifies one type of price risk?
- Financial risk—depends on the firm's ability to pay back its debt
payments and dividend payments
- Default risk—depends on how much debt the firm has, which
affects earnings and stock prices
- Operating risk—depends on the effect of the firm's operating
decisions on its operating costs
- Business cycle risk—depends on how the firm is performing
relative to its industry's leaders
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Alexandra decides to spend $50 on some new clothes instead of using that money to pay her electric bill. The opportunity cost is having the electricity turned off.
Raw materials, rent, administrative expenses, interest, and selling expenses
The consulting cost spent three months prior to the start of a project
Operating risk—depends on the effect of the firm's operating decisions on its operating costs 3 / 4
4/14/25, 5:54 AM WGU D076 Finance Skills for Managers
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Definition
For every dollar of revenue, 7 cents remain for the equity holders after all other costs are covered.
Net margin tells us the percentage of sales that will become net income, which is the amount remaining for the equity holders.
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What is default risk?
1.A firm-specific risk that comes from the probability of a loss resulting from a borrower's failure to repay a contractual obligation
2.A firm-specific risk that demonstrates the inverse relationship between the probability of default and the required rate of return
3.A market-specific risk that affects both the bonds and stocks of a firm
4.A market-specific risk that comes from the probability of a loss resulting from a borrower's failure to repay a contractual obligation
What are the effects of attempting to maximize shareholder value for a business in an unethical way?
- It often leads to decreased shareholder value for the business.
- It often decreases vulnerability to long and expensive litigations.
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