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Certified Treasury Professional Questions 326–330 (page: 67)

Updated On: 9-Feb-2026

XYZ Company is a fairly new and high growth company funded by venture capital. Which of the following performance measures is it MOST LIKELY to use?

  1. Economic value added
  2. Net present value
  3. Residual income
  4. Free cash flow

Answer(s): D



Company XYZ is a manufacturer of industrial equipment and has enjoyed a large percentage increase in profits from a small increase in revenues. Sales recently plummeted resulting in steep decline in profitability. Which of the following BEST describes the cost structure of the company?

  1. Low contribution margin
  2. High financial leverage
  3. Low variable costs
  4. High operating leverage

Answer(s): D



A customer buys a laptop for $850 and a CD for $13. Only items with sale price of $15 and greater are subject to value added tax (VAT). Assuming VAT of 8.5%, how much tax does the customer incur at the point of sale?

  1. $72.25
  2. $73.36
  3. $722.25
  4. $922.25

Answer(s): A



A U.S. financial institution expects to grow at an exponential rate to become one of the largest companies in the country. It wants to hire the best talent in the industry and is willing to pay excessive compensation. In order to achieve the high growth, it is planning on charging hidden fees on mortgages, credit cards etc. Further, it wants to engage in risky practices pertaining to over-the- counter derivatives, asset-backed securities and hedge funds. The financial institution has hired an outside law firm to determine if it is feasible to escape unwanted regulation and oversight from various government entities. Which of the following regulations prohibits the financial institution from engaging in the described practices?

  1. Gramm-Leach-Bliley Act
  2. The Dodd-Frank Act
  3. Sarbanes-Oxley Act
  4. USA Patriot Act

Answer(s): B



Company XYZ offers a retirement plan wherein the value of the plan’s assets and liabilities is measured separately. The plan’s funding and valuation can have a significant impact on the financial condition of the company. Company ABC offers a retirement plan wherein the amount owed to the participants at retirement is based solely on the account balance at the time of withdrawal with participants often bearing the responsibility for managing the investments in their account. Which of the following BEST describes the above two retirement plans and which act governs them?

  1. 403(b) and defined contribution plan; ERISA
  2. Defined benefit plan and defined contribution plan; ERISA
  3. Qualified and non-qualified plan; Pension Protection Act
  4. Defined benefit plan and defined contribution plan; Pension Protection Act

Answer(s): B



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