AFP AFP-CTP Online Practice Questions and Exam Preparation

AFP AFP-CTP Online Questions & Answers

• Question 741:

  An analyst at Davis Company uses the tax payment (TXP) banking convention for payment of state taxes. The analyst is preparing to pay $650,000 in taxes to the state where Davis Company is domiciled. What payment method will the analyst use to make the tax payment?

  A. ACH Credit
  B. Fedwire Credit
  C. Certified Check
  D. Multiple Drawee Check
  A. ACH Credit

• Question 742:

  Exhibit:

  

  If a company had the above activity at a bank for the previous month (a 31-day month), the bank was overcompensated by approximately:

  A. $1,605.
  B. $1,886.
  C. $3,491.
  D. $5,886.
  B. $1,886.

• Question 743:

  XYZ Corporation uses ABC Bank for their lending and treasury management. In addition, the bank serves as bond trustee for XYZ Corp. If XYZ Corp. becomes distressed, this relationship could create a conflict of interest for the financial institution. What barrier prevents a financial institution from sharing confidential information between divisions?

  A. Chinese wall
  B. Counterparty risk
  C. Non-disclosure agreement
  D. Sarbanes-Oxley controls
  A. Chinese wall

• Question 744:

  Which of the following is a characteristic of giro systems used in countries in Europe?

  A. They operate through their postal systems.
  B. They are primarily used for company-to-company payments.
  C. They do not replace checks for the payment of bills.
  D. They do not allow the use of direct debits and credits.
  A. They operate through their postal systems.

• Question 745:

  Company Sales Figures:

  10% of sales collected in the current month of the sale 45% of sales collected in the month after the sale 30% of sales collected two months after the sale 15% of sales collected three months after the sale January Sales $300,000 February Sales $250,000 March Sales $400,000 April Sales $450,000

  Based on the information above, what is the estimate for the company's April cash flows?

  A. $330,000
  B. $345,000
  C. $1,055,000
  D. $1,070,000
  B. $345,000

• Question 746:

  A pizza restaurant chain maintains separate accounts at bank branches near each of their 1,067 restaurants to handle the deposit of cash received. Early each morning, the company's point-of-sale system electronically transmits collection totals from the previous day to its main computer. ACH debits are then initiated to concentrate the funds from the local accounts to the concentration account the following day. Recently, several of the ACH debits have been returned for insufficient funds because deposits weren't being taken to the bank on a timely basis by the local employees. Without increasing staff at the restaurants, what could Treasury do to prevent this from happening and avoid overdrafts at the local banks?

  A. Negotiate better float schedules at its local banks.
  B. Install smart safes at each restaurant location.
  C. Use a courier to deposit to each bank 3 times per week.
  D. Use wire transfers to concentrate the cash instead of ACH.
  B. Install smart safes at each restaurant location.

• Question 747:

  A real estate development company has excess cash that it would like to invest in one of its properties:

  Property A has shown an ROI of 40%, a residual income of $25,675, and an EVA of $32,678.

  Property B has shown an ROI of 45%, a residual income of $27,635, and an EVA of $29,523.

  Property C has shown an ROI of 55%, a residual income of $22,658, and an EVA of $30,678.

  Property D has shown an ROI of 52%, a residual income of $19,675, and an EVA of $31,523.

  In which property should the company invest?

  A. Property A
  B. Property B
  C. Property C
  D. Property D
  A. Property A

• Question 748:

  Company XYZ is in its first year of operations. The company culture is conservative, and it has $500 million to invest in short-term investments. The company has a growth rate of 25% and is looking to issue an IPO in the near future. The investment manager is in the process of creating a short-term investment policy which must be approved by the board of directors. An item that should be included in the policy is:

  A. methods of monitoring compliance with the SEC.
  B. maximum dollar amount of mortgage-backed securities.
  C. internal controls for the enterprise resource planning system (ERP).
  D. methods of monitoring compliance with policies, procedures and internal controls.
  D. methods of monitoring compliance with policies, procedures and internal controls.

• Question 749:

  Two months after a government overthrow, the new Minister of Industry and Culture took over the country's largest steel company and compensated the owners at 50% of book value. What is the government's action called?

  A. Consolidation
  B. Deregulation
  C. Expropriation
  D. Nationalization
  C. Expropriation

• Question 750:

  A company may choose to use a derivative to reduce risk on which of the following types of exposure?

  I. Currency

  II. Interest rate

  III.

  Commodity price

  A. I and II only
  B. I and III only
  C. II and III only
  D. I, II, and III
  I. Currency II. Interest rate III. Commodity price
  D. I, II, and III