AFP CTP Actual Questions

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Question 24

Company RST is a seasonal retailer who has just completed its holiday season and is temporarily flush with cash. The treasurer has identified approximately $15 million of excess balances and is trying to determine what to do with the surplus cash. Cash forecasts show that the funds will be needed in approximately 30 days to replenish inventory. Which of the following plans should the treasurer implement immediately?

Options:

Leave the funds in RST’s bank account earning an ECR of 1%.

Purchase low-risk, short-term investments yielding 2%.

Prepay a $15 million, 5% loan maturing in 1 year.

Buy a long-term, highly rated investment paying 2.10%.

Question 25

The year-end income statement for a company is presented in Table 1. The balance sheet is presented in Table 2.

What is the company's return on equity?

Options:

26%

37%

65%

80%

Question 26

An international company would establish a re-invoicing center for which of the following reasons?

Options:

To reduce its international balance reporting charges

To manage the foreign exchange exposure of its foreign subsidiaries

To take advantage of interest-bearing demand deposits

To bring transaction exposures more closely in line with economic exposures

Question 27

Company XYZ sends an ACH debit file valued at $300,000 with an average item value of $1,000. The file settlement date is March 10. The file contains no duplicate items and items are split equally between corporate and consumer items. One percent of consumer items and 2% of corporate items were returned. What would be the final net settlement value for Company XYZ?