Free AFP CTP Practice Test & Real Exam Questions
A cash manager should use which of the following techniques to measure the differences among cash flows with different timings and amounts?
Correct Answer: C
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A buyer receives an invoice from a supplier that offers discount terms of 3/10, net 60. What is the effective cost of discount?
Correct Answer: A
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Which of the following are examples of covenants in loan agreements?
I. Financial ratios
II. Corporate resolutions
III. Borrower limitations
IV. Borrower obligations
I. Financial ratios
II. Corporate resolutions
III. Borrower limitations
IV. Borrower obligations
Correct Answer: A
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A bank's reserve requirement on demand deposits is 10%, and its earnings credit rate is 6%. If a company uses bank services amounting to $2,600 and has an excess of $550 in earnings credit, what is the average collected balance in the account based on a 30-day month?
Correct Answer: B
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A firm's air conditioning unit breaks down unexpectedly and must be replaced immediately. What type of liquidity requirement is this an example of?
Correct Answer: A
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To strengthen outside auditor independence with regard to publicly held companies, the Sarbanes-Oxley Act requires that:
Correct Answer: A
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The renegotiation of trade payment terms in an e-commerce environment should include which of the following?
Correct Answer: B
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All of the following are differences between Fedwire and ACH EXCEPT:
Correct Answer: D
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Which of the following occurs when the U.S. dollar strengthens?
Correct Answer: D
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Which of the following is true about disbursement ZBAs?
Correct Answer: D
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A company is looking to improve its collection rate of returned checks. If the company implements re- presented check entry (RCK) with its bank, it might see a reduction in what type of returned items?
Correct Answer: B
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Racklyn Paint Company, a new paint and construction company, has vendor payables of $2 million due periodically over the next 3 months; payroll payable to its crews of $500K each month; a mortgage of $4.4 million with a fixed rate of 6.0%; and an equipment loan of $5 million with a bank at a 30-day LIBOR plus
150 bp payment of $100K due monthly. Racklyn receives their first contract valued at $12 million with half of the contract value due at the time of contract and final payment upon completion. Racklyn expects the job to last 6 months. Which option would be the BEST use of Racklyn Paint Company's cash?
150 bp payment of $100K due monthly. Racklyn receives their first contract valued at $12 million with half of the contract value due at the time of contract and final payment upon completion. Racklyn expects the job to last 6 months. Which option would be the BEST use of Racklyn Paint Company's cash?
Correct Answer: B
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Which of the following services allows a bank to match checks presented for payment against company check issuance data?
Correct Answer: C
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Which of the following is an example of a qualitative factor used in making credit decisions?
Correct Answer: D
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