AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 461:

  A company issues $5 million of commercial paper at a discount for 60 days. The interest cost is $85,000. The backup line fee for this transaction is $2,000, and the dealer fee is $1,000. What is the annual interest rate?

  A. 10.56%
  B. 10.71%
  C. 10.74%
  D. 10.89%
  D. 10.89%

• Question 462:

  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?

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

• Question 463:

  Assuming a marginal tax rate of 36%, the taxable equivalent yield for an investment with a tax-exempt yield of 3% would bE.

  A. 1.92%.
  B. 4.08%.
  C. 4.69%.
  D. 8.33%.
  C. 4.69%.

• Question 464:

  Which one of the following ties a user's private key to a user's public key?

  A. A digital signature
  B. A digital certificate
  C. A digitized signature
  D. A digital token
  B. A digital certificate

• Question 465:

  ABC Company has recently moved away from paper-based invoicing systems and has begun implementing e-commerce solutions. Realizing that its e-commerce implementation may have a negative impact on the float of its trading partners, ABC can do which of the following to help address this concern?

  A. Change the payment discount terms for the trading partners.
  B. Allow the trading partners to use the company's e-commerce solution.
  C. Negotiate larger order quantities from the trading partners.
  D. Agree to a uniform data transfer protocol for all trading partners.
  A. Change the payment discount terms for the trading partners.

• Question 466:

  EDI infrastructure includes which of the following four PRIMARY components?

  A. Communication networks and standards, computer hardware, EDI software, and standard formats
  B. Business-to-business banking services, EDI e-commerce, EDI software, and electronic payments networks
  C. Authentication devices, evaluated receipts settlement, firewalls, and single sourcing arrangements
  D. File transfer protocol, hypertext transfer protocol, uniform resource locator, and Extensible Markup Language (XML)
  A. Communication networks and standards, computer hardware, EDI software, and standard formats

• Question 467:

  In an organization with personnel limitations, which of the following strategies should be considered to mitigate cash management system risk?

  A. Outsourcing
  B. Verification
  C. Matching
  D. Hedging
  A. Outsourcing

• Question 468:

  West Coast Retail Shop has experienced reduced cash availability in its bank account since a new store manager was hired. The manager is responsible for manually preparing daily bank deposits, which generally include a large number of checks, for processing at a bank branch in the same shopping mall as the store. Which of the following should West Coast Retail Shop implement to improve the available balance in its bank account?

  A. A Point-of-Purchase check conversion process
  B. An Image Replacement Document conversion process
  C. Transit check clearing
  D. A direct exchange with local banks
  A. A Point-of-Purchase check conversion process

• Question 469:

  A major publicly owned U.S. airline announces that it can no longer meet its pension obligations. Which organization will assume control of the airline's pension plan?

  A. The PBGC
  B. The FDIC
  C. The CIEBA
  D. The DOL
  A. The PBGC

• Question 470:

  US-based manufacturing Company XYZ is looking to deliver finished goods to ABC Company in a developing nation. The credit department wants to ensure collectability and has asked the treasury department for guidance. The desired solution may impact days sales' outstanding but will have the lowest credit risk to Company XYZ. What will treasury recommend?

  A. A standby letter of credit
  B. A draft/bill of lading
  C. Extended trade terms
  D. A consignment agreement
  A. A standby letter of credit