JJ Company incurs credit purchase and other expenses as follows Month Credit Purchase Office Expenses Selling Expenses Manufacturing Expenses March RM50,000 RM 8,000 RM 2,000 RM 6,000 April RM52,000 RM 6,000 RM 2,500 RM 8,000 May RM 55,000 RM 5,000 RM 3,000 RM 4,000 June RM 60,000 RM 7,000 RM 2,000 RM 3,000 Period of credit allowed from the suppliers is 2 months, lag in the payment of manufacturing expenses and office expense is 0 5 month and pay in advance of selling expenses is 1 month What is the total cash disbursement in May A RM60,500 B RM64,500 C RM58,500 D RM63,500 Century Sdn Bhd has its personnel limitations, which of the following strategies should be considered to mitigate cash management system risk A Matching B Hedging C Outsourcing D Verification A company feels that they should have sufficient funds to meet the cash requirement for 5 day normal period and 3 days for peak period The average daily cash outflow for normal days is RM5,000 per day What is the safety level cash for the company A RM30,000 B RM25,000 C RM15,000 D RM5,000 Some treasury management systems are capable of initiating investment purchases and loan drawdowns automatically The automating of these transactions is related to which of the following treasury management functions A Capital budget management B International trade management C Liquidity management D Payment management Kok Meng is a treasury manager of JJ Sdn Bhd, he is looking to finance new equipment that has a useful life of 5 years What type of financing would Kok Meng MOST LIKELY employ to finance the equipment A Installment term loan B Equity shares C Long term bond D High yield bond he speculative motive is the need to hold cash A To utilize it for international project B To utilize it in internal projects C To avail any future investment opportunity D For any future loss the company is expecting Which of the following not allow treasury job function to be outsourced A Maintain the customer relation B Risk management C Investment alternatives D Cash management Pristin Company uses the Baumol cash management model Cash disbursements are constant at RM80,000 each month Short term investments yield 6 5 a year, while cash held in the companys bank account earns zero interest For each purchase or sale of short term investments incurs commissions of RM20 and administration charges of RM30 What is the optimal amount to be transferred in each transaction A RM24,305 74 B RM38,430 75 C RM11,094 00 D RM29,768 33 With a Multinational Company A The decision to set a transfer price is further complicated by import duty considerations B The decision to set a transfer price is further complicated by export duty considerations C The decision to set a transfer price can be further complicated by exchange rate restrictions imposed by governments D The decision to set a transfer price is further complicated by tax considerations, if there is a difference in tax rates between the host country and the home country Company QQ needs external capital to finance a new product line Its operating leverage is high, and its revolving credit agreement contains a ratings trigger What will Company QQ MOST LIKELY do to finance its new product line A Use retained earnings B Issue convertible debentures C Issue common stock D Issue long term notes Which of the following is the BEST to describe an objective that a company going public A Increased management control B Increased managerial flexibility C Increased public disclosure D Increased liquidity A set up, independent of the treasury unit, responsible for risk monitoring, measurement analysis and reports directly to the top management for control A Mid office B Back office C Front office D Audit group Jenny is a treasurer working in JT Corporation, who is negotiating with her suppliers to allow her company to have a 25 days term of suppliers invoices Jenny is arranging A uncommitted line of credit B revolving credit agreement C short term financing D factoring of receivables Centralized treasury is essential for a company with its regional offices, what is the main objective that the company intended to achieve A increase operating costs B improve the level of control C increase borrowing costs D centrally determine depository accounts Senior management at Denmark Corporation plans to make a large capital expenditure to boost its infrastructure exactly one year from now Their primary concern is to preserve the current capital position until the expected cash outlay and maintain a minimal risk level The majority of the cash at Denmark Corporation is held in treasury notes, but management would like to also invest some of the money into corporate bonds and money market funds Which investment objective is the BEST suits the needs of Denmark Corporation A Exposure Horizon B Diversification C Liquidity D Safety Companies hold cash time to time Transitionary motive of holding cash means A Keeping the transactions for foreign trading B Keeping a cash reserve for purchasing goods and services to balance out the cash inflows and outflow C Keeping the cash for all the transaction made during a periodic term D Keeping the cash for transactions mandatory for day to day activities A wholesale foods supplier receives an order from MM Foods located in Malaysia The suppliers policy is to bill upon fulfillment of the order and not at delivery MM Foods pays upon receipt of goods A blizzard has closed the manufacturing facility and roads delivery will be delayed by two days Which type of float occurs between the receipts of an invoice by MM Foods, including the credit period, and the time MM Burgers account is debited A Collection B Deposit C Payment D Invoicing Optimal dividend policy is one that does all of the following EXCEPT A balance tax shield benefits against agency costs B distribute corporate income to investors C maintain adequate retained earnings for future growth D maximize shareholder value BP Bhd is earning a considerable return from the renovation project in Johor The project requested debt financing for RM800,000 and earned RM40,000 in interest income The project could generate a net gain on its short time equity investments of RM500,000 Total funds invested in the project was RM800,000 on 2 1 2018 and RM1,200,000 at the end of the year What is the total earnings rate on invested funds A 12 B 10 C 54 D 42

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JJ Company incurs credit purchase and other expenses as follows: Month Credit Purchase Office Expenses Selling Expenses Manufacturing Expenses March RM50,000 RM 8,000 RM 2,000

JJ Company incurs credit purchase and other expenses as follows:

Month	Credit Purchase	Office Expenses	Selling Expenses	Manufacturing Expenses
March	RM50,000	RM 8,000	RM 2,000	RM 6,000
April	RM52,000	RM 6,000	RM 2,500	RM 8,000
May	RM 55,000	RM 5,000	RM 3,000	RM 4,000
June	RM 60,000	RM 7,000	RM 2,000	RM 3,000

Period of credit allowed from the suppliers is 2 months, lag in the payment of manufacturing expenses and office expense is 0.5 month and pay in advance of selling expenses is 1 month. What is the total cash disbursement in May?

RM60,500

RM64,500

RM58,500

RM63,500

Century Sdn Bhd has its personnel limitations, which of the following strategies should be considered to mitigate cash management system risk?

Matching

Hedging

Outsourcing

Verification

A company feels that they should have sufficient funds to meet the cash requirement for 5 day normal period and 3 days for peak period. The average daily cash outflow for normal days is RM5,000 per day. What is the safety level cash for the company?

RM30,000

RM25,000

RM15,000

RM5,000

Some treasury management systems are capable of initiating investment purchases and loan drawdowns automatically. The automating of these transactions is related to which of the following treasury management functions?

Capital budget management

International trade management

Liquidity management

Payment management

Kok Meng is a treasury manager of JJ Sdn Bhd, he is looking to finance new equipment that has a useful life of 5 years. What type of financing would Kok Meng MOST LIKELY employ to finance the equipment?

Installment term loan

Equity shares

Long-term bond

High-yield bond

he speculative motive is the need to hold cash:

To utilize it for international project.

To utilize it in internal projects.

To avail any future investment opportunity.

For any future loss the company is expecting

Which of the following not allow treasury job function to be outsourced

Maintain the customer relation

Risk management

Investment alternatives

Cash management

Pristin Company uses the Baumol cash management model. Cash disbursements are constant at RM80,000 each month. Short-term investments yield 6.5% a year, while cash held in the companys bank account earns zero interest. For each purchase or sale of short-term investments incurs commissions of RM20 and administration charges of RM30. What is the optimal amount to be transferred in each transaction?

RM24,305.74

RM38,430.75

RM11,094.00

RM29,768.33

With a Multinational Company

The decision to set a transfer price is further complicated by import duty considerations.

The decision to set a transfer price is further complicated by export duty considerations.

The decision to set a transfer price can be further complicated by exchange rate restrictions imposed by governments.

The decision to set a transfer price is further complicated by tax considerations, if there is a difference in tax rates between the host country and the home country.

Company QQ needs external capital to finance a new product line. Its operating leverage is high, and its revolving credit agreement contains a ratings trigger. What will Company QQ MOST LIKELY do to finance its new product line?

Use retained earnings.

Issue convertible debentures.

Issue common stock.

Issue long-term notes.

Which of the following is the BEST to describe an objective that a company going public?

Increased management control

Increased managerial flexibility

Increased public disclosure

Increased liquidity

A _________ set up, independent of the treasury unit, responsible for risk monitoring, measurement analysis and reports directly to the top management for control.

Mid office

Back office

Front office

Audit group

Jenny is a treasurer working in JT Corporation, who is negotiating with her suppliers to allow her company to have a 25 days term of suppliers invoices. Jenny is arranging:

uncommitted line of credit.

revolving credit agreement.

short-term financing.

factoring of receivables.

Centralized treasury is essential for a company with its regional offices, what is the main objective that the company intended to achieve?

increase operating costs.

improve the level of control.

increase borrowing costs.

centrally determine depository accounts.

Senior management at Denmark Corporation plans to make a large capital expenditure to boost its infrastructure exactly one year from now. Their primary concern is to preserve the current capital position until the expected cash outlay and maintain a minimal risk level. The majority of the cash at Denmark Corporation is held in treasury notes, but management would like to also invest some of the money into corporate bonds and money market funds. Which investment objective is the BEST suits the needs of Denmark Corporation?

Exposure Horizon

Diversification

Liquidity

Safety

Companies hold cash time to time. Transitionary motive of holding cash means

Keeping the transactions for foreign trading.

Keeping a cash reserve for purchasing goods and services to balance out the cash inflows and outflow.

Keeping the cash for all the transaction made during a periodic term.

Keeping the cash for transactions mandatory for day to day activities.

A wholesale foods supplier receives an order from MM Foods located in Malaysia. The suppliers policy is to bill upon fulfillment of the order and not at delivery. MM Foods pays upon receipt of goods. A blizzard has closed the manufacturing facility and roads; delivery will be delayed by two days. Which type of float occurs between the receipts of an invoice by MM Foods, including the credit period, and the time MM Burgers account is debited?

Collection

Deposit

Payment

Invoicing

Optimal dividend policy is one that does all of the following EXCEPT:

balance tax shield benefits against agency costs.

distribute corporate income to investors.

maintain adequate retained earnings for future growth.

maximize shareholder value.

BP Bhd is earning a considerable return from the renovation project in Johor. The project requested debt financing for RM800,000 and earned RM40,000 in interest income. The project could generate a net gain on its short-time equity investments of RM500,000. Total funds invested in the project was RM800,000 on 2.1.2018 and RM1,200,000 at the end of the year. What is the total earnings rate on invested funds?

12%

10%

54%

42%