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Fundamentals of Capital Budgeting
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Fundamentals of Capital Budgeting
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Fundamentals of Capital Budgeting
In capital budgeting, a negative net present value results in
zero economic value added
percent economic value added
negative economic value added
positive economic value added
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The project whose cash flows are less than the capital invested for required rate of return then the net present value will be
negative
zero
positive
independent
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
A modified internal rate of return is considered as present value of costs and is equal to
p.v of hurdle rate
fv of hurdle rate
p.v of terminal value
fv of terminal value
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rikazzz
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Fundamentals of Capital Budgeting
An increase in marginal cost of capital and the capital rationing are two arising complications of
maximum capital budget
greater capital budget
optimal capital budget
minimum capital budget
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rikazzz
Comment
Fundamentals of Capital Budgeting
In the mutually exclusive projects, the project which is selected for comparison with others must have
higher net present value
lower net present value
zero net present value
all of the above
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The present value of future cash flows is $4150 and an initial cost is $1300 then the profitability index will be
0.0319
3.19
0.31 times
5450
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The payback period in which an expected cash flows are discounted with the help of project cost of capital is classified as
discounted payback period
discounted rate of return
discounted cash flows
discounted project cost
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The sum of discounted cash flows is best defined as
technical equity
defined future value
project net present value
equity net present value
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The number of years forecasted to recover an original investment is classified as
payback period
forecasted period
original period
investment period
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
In capital budgeting, two projects having cost of capital as 12% is classified as
hurdle rate
capital rate
return rate
budgeting rate
Author:
rikazzz
Comment
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