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Question 128

A company with high operating leverage reduces its average cost per unit by 20% as its sales volume increases by 40% annually. This an example oF.

Options:

A.

low fixed costs.

B.

low variable costs.

C.

economies of scale.

D.

equal distribution of fixed and variable costs per item.

Question 129

Which of the following credit terms would be MOST appropriate for a seasonal product that a manufacturer wants to sell to a retailer during the product's off-season?

Options:

A.

2/10, net 30

B.

2/10, prox 30

C.

2/10, net 120

D.

3/15, 2/30, net 45

Question 130

A company issues $5 million of commercial paper at a discount for 60 days. The interest cost is $85,000. The backup line fee for this transaction is $2,000, and the dealer fee is $1,000. What is the annual interest rate?

Options:

A.

10.56%

B.

10.71%

C.

10.74%

D.

10.89%

Question 131

Which of the following is an example of using cash forecasting for liquidity management?

Options:

A.

Establishing an accounts receivable collection schedule

B.

Scheduling investment maturities

C.

Assessing the degree of foreign currency exposure

D.

Determining a company's target capital structure

Page: 32 / 34
Exam Code: CTP
Exam Name: Certified Treasury Professional
Last Update: Dec 22, 2024
Questions: 932
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