AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 561:

  The following information about a company is 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%. The company's current ratio is:

  A. 0.46.
  B. 0.59.
  C. 0.93.
  D. 1.37.
  D. 1.37.

• Question 562:

  Equity section of Fisher, Inc. Financial Statement

  

  If an investor paid $1,400.00 (excluding fees) for 75 shares of common stock, what was the market value of Fisher, Inc. at the time of purchase?

  A. 15.50
  B. 15.76
  C. 16.97
  D. 18.67
  D. 18.67

• Question 563:

  Which of the following MOST often contributes to the misinterpretation of DSO?

  A. Varying fiscal year-ends
  B. Sales patterns
  C. Size of the payment discount
  D. Weekends and holidays
  B. Sales patterns

• Question 564:

  What is the MOST appropriate definition of working capital?

  A. Current liabilities plus equity
  B. Current assets plus equity
  C. Current assets minus current liabilities
  D. Current assets minus fixed assets
  C. Current assets minus current liabilities

• Question 565:

  XYZ Company is considering different methods of concentrating cash from its subsidiary accounts to its main operating account. It uses short-term borrowings with a rate of 7% to fund daily operations, and the reserve adjusted earnings credit rate on its subsidiary accounts is 1%. A review of its bank fees shows that wires (same day transfer) cost the XYZ Co. $7.00 each while ACH debits (next day transfer) cost $1.25 each. If the primary objective is to minimize costs, what must the transfer amount be (rounded to the nearest whole $) to justify the use of a wire transfer instead of an ACH to concentrate the funds?

  A. $17,490
  B. $29,982
  C. $34,979
  D. $42,583
  B. $29,982

• Question 566:

  Convertible securities consist of preferred stock anD.

  A. treasury stock.
  B. common stock.
  C. bonds.
  D. tracking stock.
  C. bonds.

• Question 567:

  The School of Cash Management is dealing with a large bank that has been highly rated by Moody's and SandP. The School has a purchasing card program in place and is not using a highly secure student registration data base. Both the School and the bank have highly automated payment processes. Based on the automation factor, the School should be MOST concerned about which of the following types of fraud exposure?

  A. Wire fraud
  B. Payroll fraud
  C. ACH kiting fraud
  D. Credit card fraud
  A. Wire fraud

• Question 568:

  PTC Corporation has determined that the threshold amount for initiating a wire transfer vs. an ACH payment for concentrating funds is $60,225. Wires cost $9.00 and save one day of float. If the opportunity cost is 5%, what is the cost of the ACH payment?

  A. $0.75
  B. $0.80
  C. $0.90
  D. $1.00
  A. $0.75

• Question 569:

  A manufacturing company has no liquidity and needs to purchase additional inventory in 60 days. Which of the following would have helped the company plan for this situation?

  A. A capital budget
  B. A short term forecast
  C. A medium term forecast
  D. A long term forecast
  C. A medium term forecast

• Question 570:

  Company XYZ has determined that its weighted average cost of capital is 12.5%. The capital structure of the company is made up of 75% equity and 25% debt. The before-tax cost of debt is 10%. Given a tax rate of 34%, what is XYZ's cost of common stock?

  A. 13.25%
  B. 14.47%
  C. 15.25%
  D. 16.53%
  B. 14.47%