AFP Certified Treasury Professional CTP Dumps in PDF

Free AFP CTP Real Questions (page: 188)

Which of the following is a KEY operational advantage of short-term debt?

  1. It can be arranged quickly and easily.
  2. It improves the current ratio for debt covenant and compliance purposes.
  3. It reduces the risk of interest rate fluctuation and lowers interest expense.
  4. It improves the overall liquidity position and reduces risk.

Answer(s): A



Which of the following is true when a company purchases goods using trade credit from suppliers?

  1. The buyer incurs no added cost if it pays on time.
  2. The supplier will charge interest to the buyer.
  3. The buyer should record this as a long-term liability.
  4. The supplier places a lien on the goods sold until payment.

Answer(s): A



Today’s modern cash management systems would include which of the following?

  1. Full integration to ERP systems
  2. Performance management systems and support
  3. Remote check disbursement software
  4. Full customer relationship management (CRM) capability

Answer(s): A



A multinational company owns a United Kingdom subsidiary that has total assets equal to £1 million and intercompany loans due to the parent company equal to $1 million. It would like to undertake a balance sheet hedge of the U.K. subsidiary’s GBP liability because it expects a depreciation of the pound. Given these circumstances, which of the following actions would be appropriate?

  1. Borrow GBP from a U.K. bank to repay the intercompany dollar debt.
  2. Borrow USD from a U.K. bank to repay the intercompany dollar debt.
  3. Take no action because exchange rates cannot be predicted.
  4. Exchange rates are fixed and thus no losses should occur.

Answer(s): A



A U.S. based multinational company is filing its U.S. tax return and notes that its U.K. subsidiary had pre-tax income equal to $1 million. The U.K. subsidiary paid an effective tax rate on this income of 40%. If the U.S. tax rate is 34%, what will be the amount of the foreign tax credit on the U.S. tax return related to the U.K. income?

  1. $60,000
  2. $280,000
  3. $340,000
  4. $400,000

Answer(s): C



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