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1. Which of the following would be MOST suitable for a risk-averse electronics manufacturer that uses copper in many of its components?

2. Which of the following is subject to transaction exposure?

3. Which of the following is subject to translation exposure?

4. Company XYZ is not sure which direction interest rates are headed.

Which of the following would be MOST suitable?

5. In evaluating alternative capital investments, a company should consider qualitative factors such as:

6. Which of the following is NOT a key area to consider when establishing treasury policies?

7. The accounting requirement that a product’s selling costs be recorded in the same period as the product’s revenue is recorded, regardless of when the cash is paid, is an example of the:

8. Use the financial statement for XYZ Company in the exhibit to answer this question.

What is the cash flow from operating activities for the current year?

9. The Governmental Accounting Standards Board (GASB) is the authoritative standard-setting body for which of the following?

10. The fixed costs to manufacture widgets are estimated to be $54,000. The benefit (sales) of a widget is estimated to be $6.78 per unit, and the variable costs are estimated at $4.48 per unit.

What is the estimated break-even point in units for the manufacture of widgets (rounded to the nearest unit)?

11. If a company has $126 million in debt at an average cost of 7% and $234 million in equity at a cost of 11%, what is its weighted average cost of capital, assuming a marginal tax rate of 35% and a risk-adjusted rate of 13%?

12. A cash manager has determined that the break-even amount for justifying a wire transfer over an ACH for concentration of funds is $145,000. Using a wire instead of an ACH gives the company use of the funds two days earlier to make overnight investments.

Based on a wire transfer cost of $10.00 and an ACH transaction cost of $0.70, what is the company’s overnight investment interest rate on a 365-day year basis?

13. Financing decisions in a budget are used to construct all of the following pro forma financial statement components EXCEPT:

14. At the end of the year, ABC Company’s actual revenue is $85,000,000 versus budget revenue of

$90,000,000. Actual operating expenses are $20,000,000 versus budget operating expenses of

$22,000,000.

Budget variance analysis would indicate a(n):

15. Which of the following is NOT a drawback to using ROI as a performance measure?

16. XYZ Company has one inventory supplier, and title to inventory is transferred to the company during the manufacturing process.

Which of the following BEST describes XYZ’s relationship with its supplier?

17. A company is starting a project to redesign its cash management information systems.

What would be an important tool in this effort?

18. The MOST common way that companies structure their treasury operations is as a:

19. The treasury management department of a company hires a consulting firm to provide research on how other companies in the industry have structured their treasury operations.

This is an example of which practice?

20. A company sells products to customers on credit, generating accounts receivable. The company uses the accrual accounting method.

Once the company collects good funds from its customers, what is the impact on the financial statements of the company?

21. A telecommunications company receives a profit of $587,542 from its cellular phone production unit in the year after investing $962,870 in a new product line.

What is the first year return on its original investment?

22. A company has a line of credit and a bond trustee agreement with a bank.

To prevent a decline in the company’s bond rating from having a negative impact on the company’s line of credit, the bank should have which of the following in place?

23. ABC Company is a national retail company and uses XYZ Bank for its collections and payroll services. XYZ has recently experienced financial problems; what is the greatest risk to ABC Company?

24. A real estate development company has excess cash that it would like to invest in one of its properties:

Property A has shown an ROI of 40%, a residual income of $25,675, and an EVA of $32,678.

Property B has shown an ROI of 45%, a residual income of $27,635, and an EVA of $29,523.

Property C has shown an ROI of 55%, a residual income of $22,658, and an EVA of $30,678.

Property D has shown an ROI of 52%, a residual income of $19,675, and an EVA of $31,523.

In which property should the company invest?

25. A deck furniture supply company maintains a large inventory during the summer sales season.

One of the PRIMARY benefits of this approach is that the company avoids which of the following costs?

26. One of the advantages of raising capital through public offerings is that:

27. In terms of capital structure, lease financing normally has the same effect as:

28. One reason for using a sale and lease-back arrangement in lease financing is to:

29. Convertible securities consist of preferred stock anD.

30. A public company’s risk profile is currently in balance. The management’s mission statement is to minimize stock devaluation. However, it is forecasting a need for working capital in the short term.

Which of the following solutions would BEST assist management in accomplishing its mission?

31. Which of the following trade payment methods virtually eliminates the seller's credit risk?

32. Kahuna Boards Co. has just experienced a very profitable year and wants to share the success with its shareholders. In order to pay dividends, a sequence of events must occur.

Which of the following chronological sequence of events is correct?

1. Stock is sold without the upcoming dividend attached.

2. Dividend is paid.

3. Board of directors announces the dividend.

4. Holders of record are specified.

33. During the 1970s, many companies instituted dividend reinvestment plans (DRIPS). There are many benefits of this plan.

What is the one negative aspect?

34. Company A regularly modifies its capital structure by repurchasing stock.

Which one of the following is a true statement?

35. What is the PRIMARY issue that management needs to consider when determining capital structure?

36. On which exchange is a company’s stock traded on the over-the-counter market?

37. The Federal Reserve can increase the money supply by:

38. A company transmits a payment file of ACH and Fedwire vendor payments to its financial institution to execute.

Which article of the Uniform Commercial Code governs these payments?

39. A U.S. exporter sells goods to a foreign buyer in U.S. dollars and wants to guarantee that payment is made by the buyer. The exporter would MOST LIKELY require a(n):

40. A lender is evaluating the creditworthiness of a company that has high levels of operating leverage.

In determining the debt capacity of the company, the bank would MOST LIKELY prefer a: