AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 271:

  Refer to the following information about a company at the end of its fiscal year.

  

  The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal tax rate is 35%. What is the company's long-term debt to total capitalization ratio?

  A. 0.44
  B. 0.67
  C. 0.73
  D. 0.78
  B. 0.67

• Question 272:

  Which cost benefit analysis technique uses the methodology to find where the present value of each project's cash inflows equals the present value of each project's outflows?

  A. Profitability index
  B. Payback period
  C. NPV
  D. IRR
  D. IRR

• Question 273:

  Based on the following information, what is the required collected balance to cover all monthly service charges?

  Deposit Float$10,000

  Reserve Requirement5%

  Earnings Credit Rate15%

  Monthly Service Charges$6,000 Days in month30

  A. $308,222
  B. $456,000
  C. $486,667
  D. $512,281
  D. $512,281

• Question 274:

  For days' sales outstanding to be a meaningful method for evaluating the effectiveness of a company's receivable collections, it is usually compared to the:

  A. overall level of past due receivables.
  B. accounts receivable turnover ratio.
  C. stated credit terms.
  D. bad debt reserve.
  C. stated credit terms.

• Question 275:

  Operational risk is defined as the risk of direct or indirect losses resulting from external events or failure of internal resources. As treasury departments maintain legacy systems that must be integrated into more complex technology, one would expect that:

  A. internal risks would increase due to the combination of manual and automated processes.
  B. external risks would decrease as the newer technology will offer more security.
  C. all risks would remain unchanged, as long as the same process controls are maintained.
  D. operational risks would decrease with the adoption of new technology.
  A. internal risks would increase due to the combination of manual and automated processes.

• Question 276:

  What is the PRIMARY issue that management needs to consider when determining capital structure?

  A. Maintaining control of ownership
  B. Complying to rating agency and lender restrictions
  C. Using common stock as a source of funds
  D. Determining the mix of debt versus equity
  D. Determining the mix of debt versus equity

• Question 277:

  A company uses a dividend capture strategy to:

  A. reduce interest expense.
  B. improve yield.
  C. liquidate investments.
  D. reduce default risk.
  B. improve yield.

• Question 278:

  Company GRA has retail locations in remote areas of Montana. All banking options within the area, deemed a safe distance for making cash deposits, fail the counterparty risk assessment. Deposits would include both cash and checks. In order to achieve immediate availability of funds, what deposit method should be utilized?

  A. Virtual vault services
  B. Field deposit systems
  C. Remote deposit capture
  D. Deposit concentration services
  A. Virtual vault services

• Question 279:

  The Treasury Manager of a chain of department stores wants to develop a medium-term forecast. Management plans to open two new stores, and anticipates same-store sales to increase by 15%. Which of the following items can be predicted with the highest degree of certainty?

  A. Taxes on stock options
  B. New product sales
  C. Fixed bond interest payment
  D. Refranchising proceeds
  C. Fixed bond interest payment

• Question 280:

  Which of the following are interest-bearing instruments?

  I. Certificates of deposit

  II. Treasury bills

  III. Treasury notes

  IV.

  Banker's acceptances

  A. I and III only
  B. I and IV only
  C. I, III, and IV only
  D. II, III, and IV only
  I. Certificates of deposit II. Treasury bills III. Treasury notes IV. Banker's acceptances
  A. I and III only