AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 581:

  Which of the following items would be classified as a source of cash on a company's statement of cash flow?

  I. Selling, general, and administrative expense

  II. Increase in accounts payable

  III. Increase in inventory

  IV.

  Depreciation expense

  A. III only
  B. I and III only
  C. II and IV only
  D. I, II, and IV only
  I. Selling, general, and administrative expense II. Increase in accounts payable III. Increase in inventory IV. Depreciation expense
  C. II and IV only

• Question 582:

  A deck furniture supply company maintains a large inventory during the summer sales season. One of the PRIMARY benefits of this approach is that the company avoids which of the following costs?

  A. Holding
  B. Opportunity
  C. Order
  D. Stock-out
  D. Stock-out

• Question 583:

  The cash manager for a company is creating a list of transactions that should be considered when determining the daily projected closing cash position. Which of the following transactions should be removed from the list?

  A. Controlled disbursement totals
  B. Estimates of non-controlled disbursement account clearings
  C. Expected settlements in collection (lockbox)
  D. Future-dated wire transfers and disbursements
  D. Future-dated wire transfers and disbursements

• Question 584:

  Which of the following should NOT be a consideration when setting an optimal dividend policy?

  A. Ability to raise other forms of capital
  B. Long-term need for capital expansion
  C. Short-term profit projection
  D. Target capital structure
  C. Short-term profit projection

• Question 585:

  With respect to the Sarbanes-Oxley Act, a company may avoid additional reporting requirements by:

  A. issuing shares in an IPO.
  B. providing an SSAE 16.
  C. redeeming bond issues.
  D. delisting its securities.
  D. delisting its securities.

• Question 586:

  Contingency plans often focus on the business supply chain, ensuring that customer service is maintained. The financial supply chain, which is equally critical to the plan, should address:

  A. supplier linkages.
  B. purchasing systems.
  C. working capital management.
  D. production resources.
  C. working capital management.

• Question 587:

  A company is considering expanding to a three-site lockbox system from its current two- site system and has collected the following data: The average collection float in the current system is:

  

  A. 3,000,000 dollar-days.
  B. 8,000,000 dollar-days.
  C. 11,000,000 dollar-days.
  D. 13,000,000 dollar-days.
  D. 13,000,000 dollar-days.

• Question 588:

  A portfolio manager purchases a floating rate mortgage backed security that would currently provide a 4% yield to the company. Since mortgage rates have been fluctuating significantly over the past month, the manager is thinking about entering into an interest rate swap to hedge against the rate movements. Although the manager would remove most of the price sensitivity of the asset by executing the swap, it would also lower the total yield on the investment due to swapcosts. What objective in the company investment policy is guiding the portfolio manager's decision?

  A. Risk analysis
  B. Risk/return trade off
  C. Preservation of principal
  D. Performance measurement
  B. Risk/return trade off

• Question 589:

  A PRIMARY objective of the cash concentration function is to:

  A. move funds to where they can be used most productively.
  B. eliminate service charges at outlying field banks.
  C. minimize the number of disbursement banks required.
  D. improve the predictability of cash outflow.
  A. move funds to where they can be used most productively.

• Question 590:

  A company has a beginning cash balance of $50,000. Its weekly cash flow forecast shows the following information for the next three weeks.

  

  Which of the following statements is true?

  A. Week 3 ending cash balance is the highest of the three weeks.
  B. Week 2 ending cash balance is the highest of the three weeks.
  C. Week 1 ending cash balance is the highest of the three weeks.
  D. The cash balance at the beginning of the three weeks is the highest of the three weeks.
  B. Week 2 ending cash balance is the highest of the three weeks.