A large U.S. company is planning to fund its Canadian subsidiary. Currently, the Canadian dollar is trading at CAD 1.25 per U.S. dollar, and the U.S. dollar is expected to depreciate in the near term. To manage this FX exposure, what technique should the company implement?
As an internal control tool, what does the matching of an invoice to the original purchase confirm?
A buyer receives an invoice from a supplier that offers discount terms of 3/10, net 60. What is the effective cost of discount?
A company determines that no combination of risk control or financing techniques will produce an adequate, risk-adjusted rate of return on manufacturing a new product. It decides to discontinue the product line. This is an example of:
A company with a relatively poor credit rating borrows most of its funds with short maturities. They may want to change its exposure to interest rates to more correctly reflect the long-term nature of the projects it is funding. Or, they may believe that long-term interest rates are going to rise, causing it to seek protection against the impact of higher interest rates on its balance sheet. Which of the following would be a solution?
Establishing the authority to open bank accounts is the responsibility of:
A company is looking for a way to finance their inventory. What is the BEST funding match?
An employer wishing to reduce operating income volatility would MOST LIKELY offer what type of retirement option to its employees?
When evaluating a FSP during the RFP process, a company should place a high value on a FSPs financial strength when the provider:
Underfunded pension obligations can be reduced by:
A large, nation-wide, retailer of plumbing fixtures is considering implementing ACH technology to improve its accounts receivable processing. Which of the following pre-authorized ACH transactions can the company use for this application?
Under Section 404 of the Sarbanes-Oxley Act, management must state its responsibility for which of the following?
The first step in the financial institution and financial services provider (FSP) selection process should be:
What does a company with a restrictive current asset investment strategy typically have?
A company is interested in lowering its overall banking costs, managing netting, pooling, re-invoicing, and centralizing FX exposure at headquarters. Which of the following options will accomplish this?
To strengthen outside auditor independence with regard to publicly held companies, the Sarbanes-Oxley Act requires that:
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?
A call option for a company has an exercise price of $50. The stock is currently trading at $60. At maturity, what should an investor who paid $3 for the option do?
A put option on a company's stock has an exercise price of $20. On the delivery date, the stock is trading at $24 per share. What should the investor who has paid $2 for the option do?
What is the PRIMARY issue that management needs to consider when determining capital structure?
