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CTP · Question #889
(Topic 9) Company A and Company X are small companies doing business with only one bank. Company A has monthly sales of approximately $1.1 million and Company X has sales of $750,000. Typically…
The correct answer is C. Company A has more financial institution risk than Company X. See the full explanation below for the reasoning.
Question
- (Topic 9)
Company A and Company X are small companies doing business with only one bank. Company A has monthly sales of approximately $1.1 million and Company X has sales of $750,000. Typically, Company A holds daily available cash balances in the range of $175,000 to $250,000 and Company X holds $90,000 to $125,000. Which of the following can be said of the cash management practices of both companies?
Options
- ACompany X has more counterparty risk than Company A.
- BCompany A has more supplier risk than Company X.
- CCompany A has more financial institution risk than Company X.
- DCompany X has more credit risk than Company A.
How the community answered
(45 responses)- A4% (2)
- B7% (3)
- C73% (33)
- D16% (7)
Community Discussion
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