Fundamentals of Capital Budgeting
Other factors held constant, the greater project liquidity is because of
less project return
greater project return
shorter payback period
greater payback period
shorter payback period
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In capital budgeting, the positive net present value results inA. negative economic value added
B. positive economic value added
C. zero economic value added
D. percent economic value added
The cash inflows are the revenues of project and are represented by
A. hurdle number
B. relative number
C. negative numbers
D. positive numbers
The set of projects or set of investments to maximize the firm value is classified as
A. optimal capital budget
B. minimum capital budget
C. maximum capital budget
D. greater capital budget
An internal rate of return in capital budgeting can be modified to make it the representative of
A. relative outflow
B. relative inflow
C. relative cost
D. relative profitability
The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be
A. 0.55
B. 1.82
C. 0.55
D. 0.0182
The situation in which one project is accepted while rejecting an other project in comparison is classified as
A. present value consent
B. mutually exclusive
C. mutual project
D. mutual consent
The cash flow which starts negative then positive then again positive cash flow is classified as
A. normal costs
B. non-normal costs
C. non-normal cash flow
D. normal cash flow
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