[Jan 25, 2022] CTP Dumps PDF and Test Engine Exam Questions - PassTorrent
Verified CTP exam dumps Q&As with Correct 932 Questions and Answers
NEW QUESTION 137
A company has large, ongoing short-term financing requirements with a maximum horizon of 250 days. It has a good credit rating and would like to use the least expensive source of short-term debt to finance its needs. The Treasurer might recommend which of the following?
- A. Asset sales through factoring of receivables
- B. A single payment note secured by marketable securities
- C. Commercial paper with a backup line of credit
- D. A committed line of credit with compensating balances
Answer: C
NEW QUESTION 138
A company invests all of its short-term excess cash in T-bills on a daily basis. To prevent delays in processing its outgoing wire transfers, the company may ask its cash management bank to establish a:
- A. daylight overdraft line.
- B. revolving line of credit.
- C. net debit cap.
- D. letter of credit.
Answer: A
NEW QUESTION 139
XYZ Holdco has multiple credit facilities with a bank under a borrowing agreement that includes certain covenants. A fire has destroyed the manufacturing plant owned by ABC, one of the XYZ subsidiaries that is part of the credit facilities. All loans, including the ABC loan, are up to date and being repaid as required. However, after the fire, the bank notified XYZ that it was in default. Which one of the following covenants is MOST LIKELY a term of the borrowing agreement?
- A. Total liabilities to assets ratio default
- B. Material adverse change
- C. Cross-default provisions
- D. Technical default
Answer: B
NEW QUESTION 140
As a result of an employee's intentional actions, an electronic payment to a supplier was misdirected to an unauthorized account. This is an example of which of the following types of risk?
- A. Employee and process risks
- B. Employee and technology risks
- C. Process and valuation risks
- D. Process and technology risks
Answer: A
NEW QUESTION 141
What is the MOST appropriate financial plan when a corporation wishes to establish its overall goals and objectives over a period of time?
- A. Risk plan
- B. Operating plan
- C. Financing plan
- D. Strategic plan
Answer: D
NEW QUESTION 142
Which of the following will MOST LIKELY be affected when a company changes its terms from net 30 to 2/10 net 30?
- A. Sales revenue
- B. Bad debt charge-offs
- C. Collection expenses
- D. Credit evaluation expenses
Answer: A
NEW QUESTION 143
A multidivisional domestic company with centralized treasury decision-making can potentially utilize intra-company lending to:
- A. establish individual subsidiary borrowing facilities.
- B. source debt in different currencies.
- C. reduce the overall liquidity of the company.
- D. lower the overall cost of short term funds.
Answer: D
NEW QUESTION 144
A convenience store chain would typically use which of the following types of collection systems?
- A. Pre-authorized payment program
- B. Network of wholesale lockboxes
- C. Field deposit system
- D. Retail lockbox
Answer: C
NEW QUESTION 145
In an organization with personnel limitations, which of the following strategies should be considered to mitigate cash management system risk?
- A. Matching
- B. Hedging
- C. Verification
- D. Outsourcing
Answer: D
NEW QUESTION 146
Companies in the U.S. with a nationwide over-the-counter/field bank collection and concentration system often deal with:
- A. many small financial institutions.
- B. one major bank with corresponding relationships.
- C. one major banking institution with branch offices at all locations.
- D. few small financial institutions.
Answer: A
NEW QUESTION 147
A globally diversified manufacturing company can manage its liquidity more effectively by:
- A. centralizing bank accounts.
- B. pooling cash of subsidiaries.
- C. using repatriation strategies.
- D. reducing its international bank network.
Answer: B
NEW QUESTION 148
An optimal concentration system minimizes all of the following EXCEPT:
- A. administrative costs.
- B. excess balances.
- C. disbursement float.
- D. transfer costs.
Answer: C
NEW QUESTION 149
In capital budgeting, a company might risk adjust which of the following?
- A. Weighted average cost of capital
- B. Times interest earned
- C. Internal rate of return
- D. After-tax cost of debt
Answer: A
NEW QUESTION 150
Which of the following factors will allow a company to decrease the amount of collected balances required to compensate its bank for services?
- A. A carry-over of a prior period's deficient balance
- B. An increase in FDIC insurance charges
- C. An increase in the bank's earnings credit rate
- D. An increase in the bank's reserve requirement
Answer: C
NEW QUESTION 151
When projecting the closing cash position, a cash manager must estimate which of the following?
- A. Clearings on non-controlled disbursement accounts
- B. ACH credits
- C. Checks in the process of collection
- D. Lockbox receipts
Answer: A
NEW QUESTION 152
The purpose of cash letters is to:
- A. request payment under standby letters of credit.
- B. arrange currency deliveries from the Fed.
- C. collect merchant charge-card sales.
- D. facilitate the clearing of paper checks.
Answer: D
NEW QUESTION 153
Refer to the following information about a company 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%.
What is the company's long-term debt to total capitalization ratio?
- A. 0.78
- B. 0.44
- C. 0.67
- D. 0.73
Answer: C
NEW QUESTION 154
Without regard to costs, which of the following concentration mechanisms maximizes investment income in a multi-bank environment?
- A. Wire transfer
- B. DTC
- C. Zero balance account
- D. ACH
Answer: A
NEW QUESTION 155
The controller is developing a financial plan that includes an operating budget and a financial budget. Which of the following statements is true?
- A. The financial budget is impacted by the company's sources and uses of cash.
- B. The financial budget is used to determine the operating activity level the company can support.
- C. The two budgets do not have any impact on each other.
- D. The operating budget is developed to determine the staffing level needed for operations.
Answer: A
NEW QUESTION 156
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. Order
- B. Stock-out
- C. Opportunity
- D. Holding
Answer: B
NEW QUESTION 157
One of the PRIMARY ways the Fed addresses systemic risk is by:
- A. establishing intra-day credit limits for ACH originators.
- B. assigning passwords and PINs to identify authorized users of its Fedwire system.
- C. setting minimum reserve requirements for its member banks.
- D. setting daylight overdraft limits for its member banks.
Answer: D
NEW QUESTION 158
Which of the following are treasury management objectives?
I. To meet obligations in a timely manner
II. To minimize holdings in non-earning cash balances
III. To monitor and assist in the control of financial risk
IV.
To evaluate costs and benefits of capital projects
- A. I and III only
- B. I, II, and III only
- C. II and IV only
- D. I, III, and IV only
Answer: B
NEW QUESTION 159
All of the following are advantages of using traditional financial ratios for analysis EXCEPT:
- A. they allow comparisons to be made between like companies.
- B. they can be used to view historical trends and availability over time.
- C. they usually reflect accounting rather than economic values.
- D. they can easily be computed from the information found in publicly available financial reports.
Answer: C
NEW QUESTION 160
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