The Treasury Department of ABC Corporation has been working hard to prevent external fraud from impacting its operating bank accounts. Recently, they implemented protective services on their disbursement accounts. This morning, the treasury analyst realized that an expected sales tax payment to the state of Maryland had not occurred. The analyst knew that it had been successfully initiated yesterday. Which service used by the corporation may need to be adjusted to pay the state of Maryland?

Financial risk management requires monitoring changes in which of the following?

I. Interest rates

II. Foreign exchange rates

III. Commodity prices

IV. Cost of insurance

A company ' s investment guidelines typically restrict all of the following EXCEPT:

Under a loan agreement, which of the following could be an event of default?

I. Nonpayment of interest when due

II. A material adverse change in the condition of the borrower

III. A debt-to-equity ratio above the limit specified

IV. Shortening the cure period by half

All of the following are reasons to use a confirmed irrevocable letter of credit EXCEPT concern about:

A company has a $300,000 credit line of which $200,000 was the average amount outstanding for the year. The terms of the loan include a 1/2 of 1% commitment fee on the unused portion, an interest rate of 10%, and a compensating balance requirement of 2% of the total credit line. The company ' s compensating balances are funded from credit-line borrowings.

If the company negotiates to eliminate the compensating balance requirement and the average borrowings remain at $200,000, the annual interest rate would be:

What step can a cash manager take to validate a cash flow forecast?

Under an operating lease, possible benefits to the lessee include which of the following?

I. It requires no initial capital outlay.

II. It can be structured as an off-balance-sheet item.

III. It can offer tax advantages.

When considering Fedwire, ACH and CHIPS as 3 different payment systems, which of the following applies only to Fedwire?

XYZ Company is considering the purchase of a security that generates a tax equivalent yield of 10% and a tax exempt yield of 7.1%. What is XYZ ' s marginal investment tax rate?

A new retail chain has decided to offer 3 payment methods: cash, cards and checks. It was determined that card payments would be the biggest sales driver and projects have been scheduled accordingly. To be in line with this strategy, which of the following should be the priority?

From a buyer’s perspective, which of the following types of float would be eliminated if checks were replaced by electronic payment methods?

For a defined benefit plan,

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?

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

In developing an operating budget, the first and MOST critical step is?

An analyst for a landscaping company wants to adjust her cash-flow forecast to account for the seasonality of outflows. How can this be accomplished?

The stock of a manufacturing company is priced so that its expected rate of return is below its required rate, as calculated by the Capital Asset Pricing Model (CAPM). Which of the following will occur in an efficient capital market?

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?

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