Ctp-5 Practice Test Pdf Site

A firm wants to accelerate check collections from customers in rural areas. Which service is most effective? A) Controlled Disbursement B) Lockbox with remote capture C) Zero Balance Account D) Positive Pay

C Rationale: Safety stock = 2 × MAD = 2 × $500,000 = $1,000,000. Domain 4: Corporate Finance & Working Capital Q7. Which ratio best indicates how efficiently a company uses its receivables? A) Current Ratio B) Debt-to-Equity C) Days Sales Outstanding (DSO) D) Inventory Turnover Ctp-5 Practice Test Pdf

C Rationale: DSO = (Accounts Receivable / Credit Sales) × 365. Lower DSO means faster collection. A firm wants to accelerate check collections from

A company issues commercial paper (CP). What is a typical requirement for CP issuance? A) Secured by physical assets B) A committed bank backup line of credit C> A maturity longer than 5 years D> Approval from the SEC for every issuance Domain 4: Corporate Finance & Working Capital Q7

A treasurer uses a forecast error analysis and finds a Mean Absolute Deviation (MAD) of $500,000. If the company holds a buffer of 2x MAD, what is the required safety stock of cash? A) $250,000 B) $500,000 C) $1,000,000 D) $2,000,000

C Rationale: ZBAs sweep funds from subsidiary accounts to a master account, allowing centralized control and maximizing investment opportunities or reducing overdrafts.