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Fundamentals of Capital Budgeting
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Fundamentals of Capital Budgeting
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Fundamentals of Capital Budgeting
Other factors held constant, but the lesser project liquidity is because of
shorter payback period
greater payback period
less project return
greater project return
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
A project whose cash flows are more than the capital invested for rate of return then the net present value will be
positive
independent
negative
zero
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
In capital budgeting, a technique which is based upon discounted cash flow is classified as
net present value method
net future value method
net capital budgeting method
net equity budgeting method
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The life that maximizes net present value of an asset is classified as
minimum life
present value life
economic life
transaction life
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
In independent projects evaluation, the results of internal rate of return and net present value lead to
cash flow decision
cost decision
same decisions
different decisions
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The project whose cash flows are sufficient to repay the capital invested for rate of return then the net present value will be
negative
zero
positive
independent
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
In large expansion programs, the increased riskiness and the floatation cost associated with project can cause
rise in marginal cost of capital
fall in marginal cost of capital
rise in transaction cost of capital
rise in transaction cost of capital
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
An uncovered cost at the start of year is divided by full cash flow during recovery year then added in prior years to full recovery for calculating
original period
investment period
payback period
forecasted period
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
The initial cost is $5000 and the probability index is 3.2 then the present value of cash flows is
8200
16000
0.0064
1562.5
Author:
rikazzz
Comment
Fundamentals of Capital Budgeting
A point where the profile of net present value crosses the horizontal axis at the plotted graph indicates the project
costs
cash flows
internal rate of return
external rate of return
Author:
rikazzz
Comment
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