Free AFP CTP Exam Questions (page: 25)

What is the MOST appropriate rate used as the discount rate in calculating NPV?

  1. Marginal cost of capital
  2. IRR
  3. Cost of debt
  4. Internal transfer rate

Answer(s): A



What kind of budget forecasts the cost for investing activities?

  1. Operating budget
  2. Sales budget
  3. Maintenance budget
  4. Capital budget

Answer(s): D



In developing an operating budget, the first and MOST critical step is?

  1. Get management approval.
  2. Generate a sales budget.
  3. Establish cost allocations.
  4. Determine capital structure.

Answer(s): B



What must be measured and monitored to ensure that a company has adequate liquidity?

  1. Net receivables
  2. Stock price
  3. Short-term borrowing obligations
  4. Net working capital

Answer(s): D



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