CFI CBCA FINAL EXAM STUDY GUIDE 2025/2026
COMPLETE QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES ||
What's the depreciation expense based on the information below?
Depreciation (percent of sales): 4%
Revenues: 60,000
Gross profit: 25,000
PP&E: 40,000 - ANSWER = 2,400 = Depreciation (percent of sales)*Revenues
What's the forecasted EBIT based on the information below?
Revenues: 56,000
Cost of goods sold: 32,000
SG&A: 8,500
Depreciation: 2,700
Interest: 1,200
Taxes: 3,800 - ANSWER = 12,800 = Revenues - Cost of goods sold - SG&A -
Depreciation
Select ALL the direct securities from the list below. - ANSWER Inventory,
buildings, intellectual property
,Which of the following does NOT describe the fixed charge of security? -
ANSWER The borrower can trade its assets unless there's a default on the loan
payment.
Which of the following describes the fixed charge of security? -
ANSWER Securities with fixed charges are usually made up of non-current
assets; The financial institute has the legal rights to the asset; The financial institute
can take possession of the asset to settle the debt in case of loan default.
Which of the following is typically used as floating charge security? -
ANSWER Accounts receivable
Which of the following is NOT typically used as floating charge security? -
ANSWER Machinery, land, letter of comfort
If a loan is secured by a limited corporate guarantee, what will happen when the
borrower is unable to repay the debt? - ANSWER The lender has the right to
pursue the assets of the company within a specific dollar amount.
Which of the following security assets are considered personal property? Select
ALL correct answers. - ANSWER Bonds and equities, Consumer goods
Which of the following security assets are NOT considered personal property?
Select ALL correct answers. - ANSWER Land, Factories, Office buildings
, Which of the following may indicate low-quality inventory? - ANSWER There
is a limited shelf-life
Which of the following is NOT an aspect to consider when evaluating the quality
of machinery and equipment? - ANSWER The cost to maintain the asset
Which of the following are aspects to consider when evaluating the quality of
machinery and equipment? - ANSWER The market value of the asset, the life
expectancy of the asset, and the condition of the asset
Which is a typical source of information used in ascertaining the value of the real
property? - ANSWER Real estate listings
It is the legal counsel's responsibility to: (Select ALL correct answers) -
ANSWER Ensure that the security is properly registered.
Advise the borrower that the lender can pursue all their assets in the event of
default.
Which of the following is NOT correct on security registration and
documentation? - ANSWER It is the borrower's responsibility to ensure that the
loan security documentation is properly completed and registered.
Which of the following are correct regarding security registration and
documentation? - ANSWER Common security documentation includes
mortgage appraisal, assignment of leases and rents, and general security
agreement.
, The registration of security is done differently in various jurisdictions around the
world.
It is the lender's responsibility to ensure all loans are adequately secured.
Test Rate = - ANSWER = Market Rate + Buffer (Helps sensitize a client's
operating results to ensure they can still service debt in the event of a material
increase in interest rates)
There are two key components to the borrower's all-in rate: -
ANSWER Lender's Cost of Funds and Client's Credit Spread
Private Lenders - ANSWER Funding derived from yield-seeking investors
Issues bonds at higher rates
Issues bonds at lower rates
Higher Cost of Funds
Commercial Bank - ANSWER Funding derived from client deposits into
checking accounts
Can borrow from central and other banks
Issues bonds at lower rates
Lower Cost of Funds
Loan Pricing
The credit spread is a direct function of the - ANSWER borrower's level of
default risk and the nature of the loan itself.
COMPLETE QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES ||
What's the depreciation expense based on the information below?
Depreciation (percent of sales): 4%
Revenues: 60,000
Gross profit: 25,000
PP&E: 40,000 - ANSWER = 2,400 = Depreciation (percent of sales)*Revenues
What's the forecasted EBIT based on the information below?
Revenues: 56,000
Cost of goods sold: 32,000
SG&A: 8,500
Depreciation: 2,700
Interest: 1,200
Taxes: 3,800 - ANSWER = 12,800 = Revenues - Cost of goods sold - SG&A -
Depreciation
Select ALL the direct securities from the list below. - ANSWER Inventory,
buildings, intellectual property
,Which of the following does NOT describe the fixed charge of security? -
ANSWER The borrower can trade its assets unless there's a default on the loan
payment.
Which of the following describes the fixed charge of security? -
ANSWER Securities with fixed charges are usually made up of non-current
assets; The financial institute has the legal rights to the asset; The financial institute
can take possession of the asset to settle the debt in case of loan default.
Which of the following is typically used as floating charge security? -
ANSWER Accounts receivable
Which of the following is NOT typically used as floating charge security? -
ANSWER Machinery, land, letter of comfort
If a loan is secured by a limited corporate guarantee, what will happen when the
borrower is unable to repay the debt? - ANSWER The lender has the right to
pursue the assets of the company within a specific dollar amount.
Which of the following security assets are considered personal property? Select
ALL correct answers. - ANSWER Bonds and equities, Consumer goods
Which of the following security assets are NOT considered personal property?
Select ALL correct answers. - ANSWER Land, Factories, Office buildings
, Which of the following may indicate low-quality inventory? - ANSWER There
is a limited shelf-life
Which of the following is NOT an aspect to consider when evaluating the quality
of machinery and equipment? - ANSWER The cost to maintain the asset
Which of the following are aspects to consider when evaluating the quality of
machinery and equipment? - ANSWER The market value of the asset, the life
expectancy of the asset, and the condition of the asset
Which is a typical source of information used in ascertaining the value of the real
property? - ANSWER Real estate listings
It is the legal counsel's responsibility to: (Select ALL correct answers) -
ANSWER Ensure that the security is properly registered.
Advise the borrower that the lender can pursue all their assets in the event of
default.
Which of the following is NOT correct on security registration and
documentation? - ANSWER It is the borrower's responsibility to ensure that the
loan security documentation is properly completed and registered.
Which of the following are correct regarding security registration and
documentation? - ANSWER Common security documentation includes
mortgage appraisal, assignment of leases and rents, and general security
agreement.
, The registration of security is done differently in various jurisdictions around the
world.
It is the lender's responsibility to ensure all loans are adequately secured.
Test Rate = - ANSWER = Market Rate + Buffer (Helps sensitize a client's
operating results to ensure they can still service debt in the event of a material
increase in interest rates)
There are two key components to the borrower's all-in rate: -
ANSWER Lender's Cost of Funds and Client's Credit Spread
Private Lenders - ANSWER Funding derived from yield-seeking investors
Issues bonds at higher rates
Issues bonds at lower rates
Higher Cost of Funds
Commercial Bank - ANSWER Funding derived from client deposits into
checking accounts
Can borrow from central and other banks
Issues bonds at lower rates
Lower Cost of Funds
Loan Pricing
The credit spread is a direct function of the - ANSWER borrower's level of
default risk and the nature of the loan itself.
