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Free CTP Exam Braindumps
Certified Treasury Professional Questions 236–240 (page: 49)

Updated On: 9-Feb-2026
Page 49 of 188
PDF with 1076 Questions

Which of the following is true of return on investment (ROI)?

  1. It includes a charge for the cost of capital in a project.
  2. It is commonly used to calculate after-tax profitability.
  3. It may cause management to accept a project with positive NPV.
  4. It is calculated as profit per dollar of invested capital.

Answer(s): D



Kensley Biscuit Company Ltd. decides to invest £125,000 in new packaging equipment to help it keep up with increased demand. As a result of this investment, the company’s annual profit improves by £11,763. If Kensley’s cost of capital is 8.25% and its corporate tax rate is 42%, what is its residual income (RI) from the investment?

  1. £842
  2. £970
  3. £1,451
  4. £11,763

Answer(s): C



A manager has prepared an analysis of five investment alternatives. Prior to selecting which alternative to invest funds in, the manager calculated the anticipated return for all options. The manager is only going to invest in one alternative. The four investments that are not chosen are:

  1. a cost of capital.
  2. a loss of leverage.
  3. an opportunity cost.
  4. a cost benefit.

Answer(s): C



Which of the following would be true for a company with high operating leverage?

  1. Its cost of goods sold does not increase as revenues increase.
  2. It has high variable costs per unit sold.
  3. If revenues increase marginally, it can achieve a large percentage increase in profits.
  4. Its semi-variable costs do not have a fixed cost component.

Answer(s): C



A company is looking to improve its collection rate of returned checks. If the company implements re-presented check entry (RCK) with its bank, it might see a reduction in what type of returned items?

  1. Consumer payments less than $2,500
  2. Corporate payments less than $2,500
  3. Consumer payments more than $2,500
  4. Corporate payments more than $2,500

Answer(s): A



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