AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 451:

  Which of the following would MOST LIKELY cause a decrease in a company's deposited checks availability?

  A. The depository bank institutes an earlier deposit deadline.
  B. The Federal Reserve implements same-day presentment.
  C. The company's lockbox bank implements weekend processing.
  D. The company encodes its own checks prior to deposit.
  A. The depository bank institutes an earlier deposit deadline.

• Question 452:

  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?

  A. $198,019.80
  B. $198,046.66
  C. $199,335.55
  D. $199,344.62
  B. $198,046.66

• Question 453:

  A French company conducts business strictly within the euro zone (the EMU). Which type of risk is of LEAST concern?

  A. Terrorist
  B. Regulatory
  C. Payment
  D. Currency
  D. Currency

• Question 454:

  The use of debt to finance a company is called:

  A. borrowing cost.
  B. risk-adjusted cost.
  C. cost of debt.
  D. financial leverage.
  D. financial leverage.

• Question 455:

  A publicly held U.S. company has reported at the beginning of the year that it expects to increase shareholder value by 5%. The current expectations are for interest rates to remain steady with a decline in fourth quarter. Treasury policy requires that investments be 90 days or less and investment grade. How should the company invest excess cash to support this goal?

  A. Commercial paper
  B. High-yield bonds
  C. 16-week U.S. Treasury bill
  D. BB rated bond
  A. Commercial paper

• Question 456:

  The interest costs on commercial paper are determined by all of the following EXCEPT the:

  A. dealer fees.
  B. backup line of credit fees.
  C. rating agency fees.
  D. maturity of the paper.
  C. rating agency fees.

• Question 457:

  Which one of the following is true of capital repatriation for multinational companies?

  A. Payment of dividends may not be taxed by host governments.
  B. Management fees paid by the subsidiary may require negotiation with the host government.
  C. Transfer pricing can be used to locate profits in subsidiaries in high tax jurisdictions.
  D. Intracompany loans which are paid back promptly may be considered dividends.
  B. Management fees paid by the subsidiary may require negotiation with the host government.

• Question 458:

  The CFO of a growing company has decided that it would be prudent to insure the company against potential loss from dishonest acts of employees. The treasurer has been given the responsibility of selecting and negotiating the type and amount of protection required. Afteranalyzing the overall risk to the company, the treasurer decides that the greatest exposure to this type of risk is within the cash management function of the company. The MOST appropriate type of protection would be:

  A. fidelity.
  B. crime.
  C. blanket.
  D. fiduciary.
  A. fidelity.

• Question 459:

  Which scenario provides the BEST example of an agency problem?

  A. A CFO hires an independent auditor to review the company's balance sheet.
  B. A Treasurer accepts a free round of golf from a banker.
  C. An account manager approves a risky loan in order to meet a salary incentive.
  D. A CEO is close friends with a competitor's CEO.
  C. An account manager approves a risky loan in order to meet a salary incentive.

• Question 460:

  What is this firm's residual income?

  Revenues: $110,000

  Expenses (including COGS and all taxes): $87,000

  Internal rate of return: 8.5%

  Capital Investment: $55,000

  ROI: 8.0%

  Cost of capital: 11%

  A. $16,500
  B. $16,950
  C. $18,325
  D. $18,600
  B. $16,950