Collections, Concentrations and Disbursements - Chapter 12

Which of the following can be considered key responsibilities of daily cash management? I. Overseeing compensation for bank services II. Management of short-term borrowing and investing III. Projecting future cash shortages and surpluses A. I only B. I and II only C. II and III only "D. I, II, and III"

"D. I, II, and III"

Which two of the following are optimal uses for short-term excess cash? I. Pay down credit lines II. Make overnight investments III. Repurchase stock IV. Make capital expenditures A. I and II B. I and III C. II and III D. II and IV

A. I and II

Company T pays $12.00 for a wire and $2.00 for an ACH transaction. They receive a wire one day sooner than they do an ACH and they earn 1.75% on the funds. What is the break-even amount for a wire instead of an ACH? "A. $246,114.29 " "B. $208,571.43 " "C. $2,085.71 " "D. $20,857.14"

"B. $208,571.43 "

"A company can pay their supplier by check or by electronic transfer. If the difference between the value date of the payment methods is 4 days from the company s perspective, what discount should the supplier offer them to get the company to pay on the same day as they did when they paid by check (rounded to the nearest 100th percent)? Assume no difference in the cost of the payment method, an opportunity cost of 8%, and float neutrality. " A. 2.00% B. 0.09% C. 0.87% D. 0.02%

B. 0.09%

A properly designed concentration system will potentially achieve which of the following results? I. Increased authority to field offices II. Increased investment income III. Improved ability to take discounts IV. Reduced dependence on third-party concentration vendors A. IV only B. I and II only C. II and III only "D. II, III, and IV only"

C. II and III only

Company ABC experienced a loss in the past when an employee in the treasury department was able to transfer $1.5 million to a personal account offshore. The company is working with a security agent to prevent this from happening in the future. ABC also accepts a large number of checks as payment. The agent has suggested upgrades to ABC s payment process. What step should be taken to help mitigate this type of risk in the future? A. Securely store check stock B. Set up international bank security C. Implement dual approval D. Implement data security standards

C. Implement dual approval

A company has grown quickly in the euro zone market. It wants to maximize its excess cash. Which would be the BEST method of concentrating funds? A. Bank Overlay B. Notional Pooling C. Physical Pooling D. Scheduled Transfer

C. Physical Pooling