AFP CTP Exam Practice Test Instant Access

Question 1

Which of the following concentration transfer alternatives provide the fastest availability of funds?

APoint-of-sale terminal transfers

BElectronic depository transfers

CWire transfers

DValue-added banks

Answer : C

Question 2

Without regard to costs, which of the following concentration mechanisms maximizes investment income in a multi-bank environment?

AWire transfer

BZero balance account

CACH

DDTC

Answer : A

Question 3

An accountant is fired after reporting to the SEC that she witnessed the CFO inappropriately reduce expenses ahead of the quarterly earnings announcement. Which of the following would apply?

AThe accountant is protected by 'whistle-blower' laws.

BThe CFO is liable for Bank Secrecy Act reporting.

CThe accountant is in violation of Section 404 of the Sarbanes-Oxley Act.

DThe CFO is protected by the code of ethics.

Answer : A

Question 4

A company has selected a specific project for investment. If the weighted average cost of capital (WACC) used to evaluate the project results in a negative net present value (NPV), which of the following will occur?

AThe WACC will be reduced.

BThe overall value of the company will be increased.

CThe overall value of the company will be reduced.

DThe overall value of the company will not be impacted.

Answer : C

Question 5

A manufacturing company's long-term capital structure is 30% debt and 70% equity, its cost of equity is 10%, its average cost of debt is 8%, and the marginal tax rate is 34%. If the company has invested total capital of $567,865 in its production unit and the unit's operating profit is $79,856, what is the economic value added (EVA) of the unit?

A($674.35)

B$3,982.14

C$5,412.56

D$6,571.78

Answer : B

Question 6

A U.S. company has a secured committed line of credit of $5.5 million and has an available balance of $4 million. The company successfully transmitted a $5.5 million wire transfer instruction out to the bank via SWIFT. The bank contacted the company and informed it that the wire transfer would not be processed. What is the MOST LIKELY reason the bank gave the company?

AWires exceeding $5 million cannot be transmitted using SWIFT.

BThe bank imposed a guidance line of credit on the account.

CThe company exceeded its compensating balance requirement.

DThe bank refused funding on the company's discretionary line of credit.

Answer : B

Question 7

Treasury uses all of the following types of internal information EXCEPT:

Aprojected weekly sales.

Bsecurity safekeeping activity.

Clarge outstanding collection items.

Ddebt repayment schedule.

Answer : B

AFP CTP Certified Treasury Professional Exam Practice Test