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Certified Treasury Professional Questions 221–225 (page: 46)

Updated On: 9-Feb-2026

A company with high operating leverage reduces its average cost per unit by 20% as its sales volume increases by 40% annually. This an example oF.

  1. low fixed costs.
  2. low variable costs.
  3. economies of scale.
  4. equal distribution of fixed and variable costs per item.

Answer(s): C



The controller is developing a financial plan that includes an operating budget and a financial budget. Which of the following statements is true?

  1. The financial budget is used to determine the operating activity level the company can support.
  2. The two budgets do not have any impact on each other.
  3. The operating budget is developed to determine the staffing level needed for operations.
  4. The financial budget is impacted by the company’s sources and uses of cash.

Answer(s): D



Amalgamated Binding Consolidators takes 20 days to convert its raw materials to finished goods, 5 days to sell it, and 15 days to collect its credit sales. What is the company’s days receivable period?

  1. 5 days
  2. 15 days
  3. 20 days
  4. 40 days

Answer(s): B



A bank is evaluating the credit risk for a company seeking to optimize costs and originate a high volume of outgoing ACH payments. What is the BEST provision the bank should establish to control its credit exposure?

  1. An intraday credit limit for the company
  2. A limit on the number of items processed per day
  3. An overdraft facility for the company
  4. A standby letter of credit for the company

Answer(s): A



A large retailer is preparing to accept credit cards and anticipates monthly credit card sales of $1,000,000. If the terms with the acquiring bank include bundled allocated fees of 6% and the retailer wishes to delay fee payment as long as possible, what should the retailer do?

  1. Accept gross settlement.
  2. Place a hold on consumer credit limits.
  3. Receive net settlement.
  4. Delay funds transfer to card-issuing banks.

Answer(s): A



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