AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 161:

  A manufacturing company's long-term capital structure is 30% debt and 70% equity, its cost of equity is 10%, its average cost of debt is 8%, and the marginal tax rate is 34%. If the company has invested total capital of $567,865 in its production unit and the unit's operating profit is $79,856, what is the economic value added (EVA) of the unit?

  A. ($674.35)
  B. $3,982.14
  C. $5,412.56
  D. $6,571.78
  B. $3,982.14

• Question 162:

  A corporation is considering utilizing ACH transactions for its large value transfers, as opposed to wire transfers. Which of the following would MOST LIKELY deter the corporation from implementing this change?

  A. ACH transactions are more expensive.
  B. The corporation has a low credit rating.
  C. Trading partners may not accept ACH.
  D. The risk of fraud is greater.
  B. The corporation has a low credit rating.

• Question 163:

  Company A anticipates the following cash inflows and outflows for the next three months:

  

  If the company's treasurer is preparing a cash-flow projection for Month 2, and he is focusing purely on items that can be projected with a fair degree of certainty, what will the net projection be?

  A. ($119,000)
  B. ($104,000)
  C. $131,000
  D. $146,000
  C. $131,000

• Question 164:

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

  A. More than one factor may affect the event being measured.
  B. Seasonality cannot be incorporated into the forecast.
  C. A large amount of data is required.
  D. It is only valid for long-term forecasting.
  C. A large amount of data is required.

• Question 165:

  The issue of corporate governance in publicly traded companies arises from:

  A. the separation of shareholder ownership and management control.
  B. the conflict between the interests of bond holders and equity holders.
  C. the secrecy surrounding the proceedings of board of directors meetings.
  D. the inherent conflict of interest that exists when accounting firms are paid to provide audit services.
  A. the separation of shareholder ownership and management control.

• Question 166:

  Company XYZ has an underfunded defined benefit plan. Company XYZ is required to provide filings for this plan to all of the following EXCEPT:

  A. the Department of Labor.
  B. the Pension Benefit Guaranty Corporation.
  C. the Securities and Exchange Commission.
  D. plan participants.
  C. the Securities and Exchange Commission.

• Question 167:

  In recent years, there has been a sharp increase in the use of technology for certain financial transactions. Which of the following has increased dramatically over recent years?

  A. B2C
  B. C2B
  C. C2C
  D. B2B
  C. C2C

• Question 168:

  Treasury policies should be approved by the:

  A. audit committee.
  B. controller.
  C. board of directors.
  D. external auditors.
  C. board of directors.

• Question 169:

  An investment is purchased for $10,000.00 that offers compounding of the first year's interest and it matures at the end of year two. If the value at maturity is $11,664.00, what is the rate of return on the investment?

  A. 7%
  B. 8%
  C. 9%
  D. 10%
  B. 8%

• Question 170:

  Under Section 404 of the Sarbanes-Oxley Act, management must state its responsibility for which of the following?

  A. Knowledge of the penalties for noncompliance
  B. Selection of auditors who are knowledgeable about Sarbanes-Oxley requirements
  C. Establishment and maintenance of adequate internal controls for financial reporting
  D. Accuracy and completeness of financial statements
  C. Establishment and maintenance of adequate internal controls for financial reporting