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CTP AFP Exam Lab Questions

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Question 100

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?

Options:

A.

($674.35)

B.

$3,982.14

C.

$5,412.56

D.

$6,571.78

Question 101

What is the primary weakness of a risk management policy that includes risk control without specifically providing a plan for risk financing?

Options:

A.

Resources are used to pay for losses that could have been prevented.

B.

Funding must be set aside for self-insurance.

C.

There is an increase in the potential for claims of negligence.

D.

Catastrophic losses could result in bankruptcy.

Question 102

A privately held company is planning to issue an IPO. If the company decides to do so, which of the following will MOST LIKELY result?

Options:

A.

Decreased liquidity for the company’s stock

B.

Decreased reporting and disclosure costs for company

C.

Increased managerial flexibility for owners of the company

D.

Increased ability to determine company value

Question 103

Which of the following is the MOST accurate statement regarding the passage of the Sarbanes-Oxley Act?

Options:

A.

It is the latest in a long line of corporate governance acts.

B.

It was the first corporate governance act in American history.

C.

It was a drastic change in the regulation of corporate governance.

D.

It had little effect on corporate governance.

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