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Certified Treasury Professional Questions and Answers

Question 117

A major toy retailer operates 65 stores throughout the Midwest. Which of the following collection methods is MOST LIKELY to be used by this company?

Options:

Field deposit

Preauthorized debit

Direct deposit

Wholesale lockbox

Question 118

The term "factoring" refers to a:

Options:

mathematical formula used in calculating bond prices.

short-term financing method.

reduction of bank fees related to volume.

Federal Reserve Open Market Committee activity.

Question 119

A multinational corporation has a successful subsidiary in a country that taxes cross-border dividend payments at 72%. Collections on accounts receivable average 90% per month, and the average rate on local government bond investments is 2.5%. What would be the BEST method for the company to repatriate local profits?

Options:

The company charges the subsidiary negotiated licensing fees on proprietary software.

The subsidiary sets up a re-invoicing center in another, tax-friendly country to manage a transfer pricing program.

The subsidiary lends funds to the parent. The loan is not repaid and the subsidiary writes it off.

Set up an in-house bank program at the successful subsidiary to make use of the excess liquidity in-country.

Question 120

Multi-divisional or multi-subsidiary companies have opportunities to optimize their working capital position and overall liquidity by doing which of the following?

Options:

Consolidating the cash resources of all divisions and subsidiaries in order to pay down corporate debt

Allocating corporate debt to each division or subsidiary according to its cash needs

Negotiating with suppliers to extend their payment terms for key divisions or subsidiaries

Establishing strict credit standards that are uniform for all divisions or subsidiaries

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Certified Treasury Professional Questions and Answers

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