AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 31:

  A treasurer is evaluating a project that will cost $1,000 but will return cash flows of $225, $225, $300, $750, and $750 in years 1 through 5, respectively. The company's interest rate on its debt is 10% and its marginal cost of capital is 15%. What is the Net Present Value (NPV) of this project?

  A. $364.74
  B. $459.48
  C. $593.84
  D. $643.47
  A. $364.74

• Question 32:

  The Cash Manager of ABC Logistics, Inc. sets a daily cash position by noon. All departments have been given an 11 a.m. cut-off for presenting wire requests and 2 p.m. for ACH requests. A wire request came in at 3:30 p.m. to make an insurance premium payment, in order to receive a discount. What liquidity reserve requirement is impacted?

  A. Regulatory
  B. Transaction
  C. Opportunistic
  D. Precautionary
  C. Opportunistic

• Question 33:

  Under an operating lease, possible benefits to the lessee include which of the following?

  I. It requires no initial capital outlay.

  II. It can be structured as an off-balance-sheet item.

  III.

  It can offer tax advantages.

  A. I only
  B. I and II only
  C. II and III only
  D. I, II, and III
  I. It requires no initial capital outlay. II. It can be structured as an off-balance-sheet item. III. It can offer tax advantages.
  D. I, II, and III

• Question 34:

  Which of the following fundamental factors involved in determining an operational risk management strategy is most affected by the new corporate governance standards and "whistle-blower" laws?

  A. Procedures
  B. Culture
  C. Reporting
  D. Technology
  B. Culture

• Question 35:

  A company that has facilities in different states and wants to control funding and facilitate check cashing would use which of the following?

  A. Bank cashier's checks
  B. Multiple drawee checks
  C. Controlled disbursements
  D. Staggered funding
  B. Multiple drawee checks

• Question 36:

  Which of the following is NOT a component of the operating cycle?

  A. Determining stale inventory
  B. Acquiring materials or resources
  C. Selling goods or services
  D. Collecting payment
  A. Determining stale inventory

• Question 37:

  A hamburger patty supplier receives an order from ABC Burgers located in Minnesota. The supplier's policy is to bill upon fulfillment of the order and not at delivery. ABC Burgers pays upon receipt of goods. A blizzard has closed the manufacturing facility and roads; delivery will be delayed by two days. Which type of float occurs between the receipt of an invoice by ABC Burgers, including the credit period, and the time ABC Burgers' account is debited?

  A. Payment
  B. Invoicing
  C. Collection
  D. Disbursement
  A. Payment

• Question 38:

  A company receives proceeds of $1,119,274 from the sale of $1,150,000 worth of commercial paper. The paper is outstanding for 95 days. If a 360-day year is used, the company's annual interest rate is closest to which of the following?

  A. 10.13%
  B. 10.27%
  C. 10.40%
  D. 10.54%
  C. 10.40%

• Question 39:

  There are 31 calendar days in the month, and the opportunity cost of funds is 9%.

  

  What is the annual cost of float for the batches listed?

  A. $78,387.09
  B. $78,532.25
  C. $79,838.71
  D. $82,499.99
  C. $79,838.71

• Question 40:

  While revising the investment policy, the CFO performs a sensitivity analysis for the company's cash flow from investments, and identifies that increasing the maximum dollar value for bond purchases will improve returns by 10% on average, all other variables being equal. What issue will the CFO now need to address in the investment policy?

  A. Exception management
  B. Valuation of investments
  C. Internal and external controls
  D. Performance management and reporting
  D. Performance management and reporting