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WGU C708 PRINCIPLES OF FINANCE OA EXAM
ALL 600 QUESTIONS AND VERIFIED SOLUTIONS
LATEST UPDATE THIS YEAR
QUESTION: 1. Which variable must be considered when a corporation's finance department is determining the best strategy for financing a project?
- The amount of trade credit from suppliers for the project
- Recent changes to the federal funds rate
- The bid-ask spread for the company's stock
- The amount of debt and equity financing currently in use - ANSWER-D. The amount of debt
and equity financing currently in use
QUESTION: 2. An individual is interested in establishing a lawn care business as a sole proprietorship. What will be a disadvantage of choosing this business model?
- Frozen investments
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- Unlimited liability
- Government regulations
- Management disagreements - ANSWER-B. Unlimited liability
Q; 3. The credit manager for a company is responsible for setting the company's credit policy regarding availability and limits for customers. What is one of the additional responsibilities of this credit manager?
- Purchasing insurance
- Collecting past-due accounts
- Monitoring accounts payable
- Investing excess cash - ANSWER-B. Collecting past-due accounts
QUESTION:4. Which activity is financial management responsible for?
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- Researching different products to bring to market
- Reporting past earnings for shares of stock
- Ensuring sufficient financing is available
- Verifying the balance sheet is properly constructed - ANSWER-C. Ensuring sufficient financing
is available
QUESTION: 5. What is one of the main areas of the financial environment?
- Human resources
- Marketing
- Investments
- Foreign relations - ANSWER-C. Investments
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QUESTION: 6. What is a common challenge in the world of finance?
- It causes investor anxiety due to a volatile stock market
- It generally operates with a high degree of uncertainty
- It is difficult to abide by generally accepted accounting principles. (GAAP)
- It has to comply with banking regulations that are subject to change - ANSWER-B. It generally
operates with a high degree of uncertainty
QUESTION: 7. What is one benefit of a sole proprietorship?
- The owner has uninterrupted control of the business
- The company can continue to exist with the death of the owner
- The business is taxed separately from the owner's personal taxes
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