AFP CTP Exam - Topic 5 Question 7 Discussion

Actual exam question for AFP's CTP exam

Question #: 7
Topic #: 5

[All CTP Questions]

XYZ Company's cash manager is evaluating cash concentration transfer options. The company has an 8% cost of funds and $50,000 in average daily field cash receipts. The wire transfer results in the transfer of funds one day faster. Which of the following options correctly ranks the transfer choices from most cost-effective to least cost-effective?

1. Electronic depository transfer costing $1.00

2. Electronic depository transfer costing $2.50

3. Wire transfer costing $8.00

4. Wire transfer costing $15.00

A1, 2, 3, 4

B1, 3, 2, 4

C3, 1, 2, 4

D3, 4, 1, 2

Show Suggested Answer

Suggested Answer: C

by Salena at Mar 22, 2025, 11:40 AM

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Marisha

3 months ago

Not sure if the faster transfer is worth the extra cost.

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Timothy

3 months ago

Definitely option A, those fees are low!

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Margot

3 months ago

Wait, why would anyone choose the $15 wire transfer?

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Lashawna

3 months ago

I’m a bit confused about the one-day faster transfer. Does that really make the wire transfers more cost-effective overall?

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Carma

4 months ago

I practiced a similar question where we had to compare costs, and I think the electronic transfers should rank higher because they cost less.

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Kattie

4 months ago

I think option B makes the most sense!

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Kirk

4 months ago

The wire transfer costs way more than the electronic options.

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Ira

4 months ago

I think the wire transfers are more expensive, but they might save time, which could be a factor in the ranking.

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Josefa

4 months ago

I remember we discussed how to calculate the cost of funds for different transfer methods, but I'm not sure how to apply it here.

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Malinda

5 months ago

I feel pretty confident about this one. I just need to do the math to determine which option has the highest net cost savings.

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Talia

5 months ago

This is tricky, I'm not sure I fully understand how to rank the options from most to least cost-effective. I'll need to re-read the question carefully.

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Alesia

5 months ago

Okay, I think I've got it. The key is to calculate the daily cost savings from the faster transfer and compare that to the transfer fee for each option.

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Celeste

5 months ago

Hmm, I'm a bit confused about how to compare the different transfer options. Do I need to factor in the cost of funds as well?

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Bulah

5 months ago

This question seems straightforward, I just need to calculate the cost-effectiveness of each option based on the transfer speed and cost.

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Lorrine

6 months ago

Easy peasy, just plug in the numbers and sort them from lowest to highest. The wire transfers are more expensive, but they're faster, so that's the tricky part.

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Micaela

6 months ago

Okay, I think I've got this. We want to rank the options from most to least cost-effective, so we need to calculate the total cost for each one, including the cost of funds.

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Serina

6 months ago

Hmm, I'm a bit confused. Do we need to consider the cost of funds as well as the transfer fees? Not sure how that factors in.

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Amina

6 months ago

This question seems straightforward, just need to compare the costs and speed of the different transfer options.

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Raul

12 months ago

I think the correct ranking is 1, 3, 2, 4 which is option B.

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Larae

12 months ago

Haha, Adelle's got a point. Let's just hope the exam doesn't require us to do any advanced math. I'm more of a word person myself.

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Selene

11 months ago

I agree, the wire transfer costing $8.00 seems to be the most cost-effective.

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Cecilia

11 months ago

I think the correct ranking is option C) 3, 1, 2, 4.

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Jeniffer

1 year ago

I believe the wire transfer costing $15.00 is the least cost-effective option.

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Adelle

1 year ago

This question is making my head spin. Can we get a calculator up in here or something?

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Olene

10 months ago

Let's double-check the calculations just to be sure.

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Brigette

10 months ago

I see your point, but I believe option C is more cost-effective overall.

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Jeannetta

11 months ago

But wouldn't option B also make sense? 1, 3, 2, 4

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Kati

11 months ago

I think the correct ranking is option C: 3, 1, 2, 4

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Dorian

1 year ago

I agree with Ahmed. The wire transfer options, despite the higher costs, are likely the most cost-effective due to the faster fund transfer.

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Cyril

1 year ago

I'm not sure about that. The electronic depository transfer options seem like they could be more cost-effective, especially the one costing $1.00.

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Glendora

1 year ago

I agree with Luann, the electronic depository transfer at $1.00 seems like the best choice.

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Ahmed

1 year ago

The wire transfer option seems to be the most cost-effective, since it results in the transfer of funds one day faster.

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Rory

1 year ago

So the ranking would be 3, 1, 2, 4.

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Danica

1 year ago

I agree, it's worth it to pay a little more for the faster transfer.

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Linn

1 year ago

I think the wire transfer costing $8.00 is the most cost-effective option.

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Luann

1 year ago

I think the most cost-effective option is the electronic depository transfer costing $1.00.

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