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AFP CTP Exam Questions
Certified Treasury Professional (Page 12 )

Updated On: 16-Feb-2026
Page 12 of 188
PDF with 1076 Questions

If a company has $126 million in debt at an average cost of 7% and $234 million in equity at a cost of 11%, what is its weighted average cost of capital, assuming a marginal tax rate of 35% and a risk- adjusted rate of 13%?

  1. 8.7%
  2. 9.6%
  3. 10.0%
  4. 10.9%

Answer(s): A



A cash manager has determined that the break-even amount for justifying a wire transfer over an ACH for concentration of funds is $145,000. Using a wire instead of an ACH gives the company use of the funds two days earlier to make overnight investments. Based on a wire transfer cost of
$10.00 and an ACH transaction cost of $0.70, what is the company’s overnight investment interest rate on a 365-day year basis?

  1. 0.95%
  2. 1.17%
  3. 2.34%
  4. 2.57%

Answer(s): B



Financing decisions in a budget are used to construct all of the following pro forma financial statement components EXCEPT:

  1. debt.
  2. interest expense.
  3. shareholder’s equity.
  4. inventory.

Answer(s): D



At the end of the year, ABC Company’s actual revenue is $85,000,000 versus budget revenue of $90,000,000. Actual operating expenses are $20,000,000 versus budget operating expenses of $22,000,000. Budget variance analysis would indicate a(n):

  1. favorable revenue variance and an unfavorable operating expenses variance.
  2. favorable revenue variance and a favorable operating expenses variance.
  3. unfavorable revenue variance and a favorable operating expenses variance.
  4. unfavorable revenue variance and an unfavorable operating expenses variance.

Answer(s): C



Which of the following is NOT a drawback to using ROI as a performance measure?

  1. It may be misleading when cash flows are not evenly distributed over time.
  2. It does not consider the profit generated by a project.
  3. It does not include a charge for cost of capital.
  4. It may lead to rejection of a positive NPV project.

Answer(s): B






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