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AFP-CTP Real Exam Questions

Certified Treasury Professional

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Question 1 Single choice

XYZ Corporation is presently a short-term borrower and uses a revolving line of credit with an interest rate of 7%. The Treasurer would like to reduce interest expense and increase liquidity without renegotiating the line of credit.

Which of the following projects should the Treasurer support in order to achieve this objective as quickly as possible?

  1. A

    Store operations believes that an increase in inventory levels will raise sales as the corporation eventually becomes known for its wide selection.

  2. B

    Purchasing is trying to extend terms from net 30 to net 60 with one of their primary vendors. The vendor will agree if XYZ concentrates purchases with them.

  3. C

    Accounts receivable is spending capital to improve its collection system. With the faster collections that will result, it anticipates recovering the outflows over a two-year period.

  4. D

    One large store is being remodeled. When complete, it should generate sufficient additional sales within one year to cover the capital expenditure and produce a positive return on investment.

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Correct answer: B

Question 2 Single choice

Which of the following factors would the cash manager consider when deciding whether to make a payment via Fedwire or ACH?

1. Cost of the payment

2. Payment due date

3. Availability of customer's funds

4. Loss of float

  1. A

    1

  2. B

    1 and 2

  3. C

    3 and 4

  4. D

    2, 3, and 4

Show answer and explanation

Correct answer: B

Question 3 Single choice

Subtracting dividends from net income available to common shareholders is reflected as a change to which of the following balance sheet items?

  1. A

    Treasury stock

  2. B

    Paid-in capital

  3. C

    Common stock at par value

  4. D

    Retained earnings

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Correct answer: D

Question 4 Single choice

Company J is looking to perform an A/R cash analysis based on the following sales information:

60% of sales are collected within two months after sale. After three months, $135,000 of January's sales were collected.

What was the dollar amount of January's sales collected in April?

  1. A

    $15,000

  2. B

    $45,000

  3. C

    $90,000

  4. D

    $135,000

Show answer and explanation

Correct answer: B

Question 5 Single choice

Which function involves evaluating alternative projects in relation to one another and in relation to the company's cost structure?

  1. A

    Capital budgeting

  2. B

    Corporate forecasting

  3. C

    Financial planning

  4. D

    Financial risk management

Show answer and explanation

Correct answer: A

Question 6 Single choice

The main objective of a company's international cash management function is to:

  1. A

    reduce cross-border fund transfers.

  2. B

    collect and disburse cash.

  3. C

    optimize global cash resources.

  4. D

    minimize foreign exchange risk.

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Correct answer: C

Question 7 Single choice

Which of the following could be considered a weakness of a forecast derived by regression analysis?

  1. A

    More than one factor may affect the event being measured.

  2. B

    Seasonality cannot be incorporated into the forecast.

  3. C

    A large amount of data is required.

  4. D

    It is only valid for long-term forecasting.

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Correct answer: C

Question 8 Single choice

A seller's cost of capital is 12%. The average credit sale is $200,000, and the credit terms are 2/10, net 30.

What is the present value of receiving full payment on day 30?

  1. A

    $198,019.80

  2. B

    $198,046.66

  3. C

    $199,335.55

  4. D

    $199,344.62

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Correct answer: B

Question 9 Single choice

A large, nation-wide, retailer of plumbing fixtures is considering implementing ACH technology to improve its accounts receivable processing.

Which of the following pre-authorized ACH transactions can the company use for this application?

  1. A

    ARC (Accounts Receivable Conversion)

  2. B

    CIE (Customer-Initiated Entry)

  3. C

    TEL (Telephone-Initiated Entry)

  4. D

    WEB (Internet-Initiated Entry)

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Correct answer: B

Question 10 Single choice

A company recently implemented a treasury code of conduct, which defined appropriate actions and business behaviors. The company developed policies and procedures that assigned duties to managers, and distributed the code to all treasury employees.
The treasury group could have improved upon this implementation by doing which one of the following?

  1. A

    Having the code of conduct reviewed by the marketing department

  2. B

    Providing training on the code to all employees

  3. C

    Having the code certified under Sarbanes-Oxley Act requirements

  4. D

    Incorporating the code under its disaster recovery plan

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Correct answer: B