Question 1
Which of the following is a PRIMARY responsibility of a company's risk management function?
Question 2
The Treasurer at ABC Company currently uses an in-house company-processing lockbox center. The Treasurer has asked for an analysis to determine the major advantage of using a traditional check/mail-based lockbox system. ABC receives 287,000 payments per month and hired seven additional staff members to process the payments in-house. Additionally, $389,000 was invested in the equipment used to process the payments and NSF checks have decreased 7% since using the in-house center. The equipment's current market value is equal to its book value. What major advantage should the analysis indicate?
Question 3
Company XYZ has determined that its weighted average cost of capital is 12.5%. The capital structure of the company is made up of 75% equity and 25% debt. The before-tax cost of debt is 10%. Given a tax rate of 34%, what is XYZ's cost of common stock?
Question 4
Which of the following are important uses of variance analysis in comparing actual cash flows with projected cash flows?
I) Identifying unanticipated changes in inventory
II) Enhancing short-term investment income
III) Validating a capital budget
IV) Identifying delays in accounts receivable collections
Question 5
Which two of the following are necessary to calculate average collected balances?
I. Deposit float
II. Reserve requirements
III. Ledger balance
IV.
Earnings credit rate