Company RST is a seasonal retailer who has just completed its holiday season and is...

Vendor: AFP
Product: CTP
Update on: Oct 21, 2025
Questions: 1076

AFP CTP Question Answer

Company RST is a seasonal retailer who has just completed its holiday season and is temporarily flush with cash. The treasurer has identified approximately $15 million of excess balances and is trying to determine what to do with the surplus cash. Cash forecasts show that the funds will be needed in approximately 30 days to replenish inventory. Which of the following plans should the treasurer implement immediately?

Leave the funds in RST’s bank account earning an ECR of 1%.

Purchase low-risk, short-term investments yielding 2%.

Prepay a $15 million, 5% loan maturing in 1 year.

Buy a long-term, highly rated investment paying 2.10%.