CTP Practice Exam | Questions with 100% Correct Answers | Updated & Verified

CTP Practice Exam | Questions with 100% Correct Answers | Updated & Verified A cash manager at a retailer forecasts a positive collected cash position for the end of the current day. The company has an overdraft facility at 10%, a separate investment account earning 8% before taxes, an earnings credit rate of 8% and an outstanding single payment note at 9.5% maturing in 1 week. This month's bank service fees are expected to exceed the earnings credit. Which of the following intra-day options would be the MOST economically positive for the company? A. Leave the funds in the account B. Redeem the single payment note C. Prepay administrative expenses D. Transfer funds to the investment account - A A company can pay their supplier by check or by electronic transfer. If the difference between the value date of the payment methods is 4 days from the company's perspective, what discount should the supplier offer them to get the company to pay on the same day as they did when they paid by check (rounded to the nearest 100th percent)? Assume no difference in the cost of the payment method, an opportunity cost of 8%, and float neutrality. A. 2.00% B. 0.09% C. 0.87% D. 0.02% - B ABC Company, a leading provider of office supplies, has successfully implemented EDI based on a request from one of its customers. ABC will not only benefit from the strategic alliance that will result, but as more of ABC's customers adopt the program, ABC will also experience a positive impact on its: A. EFT costs B. C2C levels C. Value added networks D. Inventory levels - D A portfolio manager purchases a floating rate mortgage backed security that would currently provide a 4% yield to the company. Since mortgage rates have been fluctuating significantly over the past month, the manager is thinking about entering into an interest rate swap to hedge against the rate movements. Although the manager would remove most of the price sensitivity of the asset by executing the swap, it would also lower the total yield on the investment due to swap costs. What objective in the company investment policy is guiding the portfolio manager's decision? A. Risk analysis B. Risk/return trade off C. Preservation of principal D. Performance measurement - B A company is experiencing the following long-term trend on a month-over-month basis: • Sales are increasing by $100,000, a 15% increase. • Accounts receivable are increasing by $5,000, a 1% increase. • Accounts payable are increasing by $20,000, a 4% increase. • Labor expenses are increasing by $40,000, a 3% increase. With all other income, expenses, long-term assets and liabilities remaining stable, this trend would MOST LIKELY prompt what action by the company? A. Financing working capital requirements B. Repaying short-term debt C. Reducing labor costs D. Factoring accounts receivable - B A properly designed concentration system will potentially achieve which of the following results? I. Increased authority to field offices II. Increased investment income III. Improved ability to take discounts IV. Reduced dependence on third-party concentration vendors A. IV only B. I and II only C. II and III only D. II, III, and IV only - c