Capital Budgeting And Cost Benefit Analysis MCQs

Option A: 0.475% per year

Option B: 4.475% per year

Option C: 3.475% per year

Option D: 2.475% per year

Correct Answer: 2.475% per year ✔

Option A: negative net present value

Option B: zero net present value

Option C: positive net present value

Option D: both b and c

Correct Answer: both b and c ✔

Option A: vertical cash flows

Option B: discounted cash flows

Option C: lean cash flows

Option D: future cash flows

Correct Answer: discounted cash flows ✔

Option A: increase in operating income

Option B: average investment over five years

Option C: average capital invested

Option D: average rate of return

Correct Answer: average investment over five years ✔

Option A: net present value

Option B: net future value

Option C: net discounted value

Option D: net recorded cash value

Correct Answer: net present value ✔

Option A: nominal rate of return

Option B: accrual accounting rate of return

Option C: real rate of return

Option D: required rate of return

Correct Answer: real rate of return ✔

Option A: cash value of money

Option B: net initial investment

Option C: net future value

Option D: time value of money

Correct Answer: net initial investment ✔

Option A: horizontally across dimension

Option B: horizontally upward dimension

Option C: vertically upward dimension

Option D: both a and c

Correct Answer: both a and c ✔

Option A: nominal rate of return

Option B: accrual accounting rate of return

Option C: real rate of return

Option D: required rate of return

Correct Answer: nominal rate of return ✔

Option A: net value cash flow method

Option B: payback method

Option C: single cash flow method

Option D: lean cash flow method

Correct Answer: payback method ✔

Option A: $10,511,000

Option B: $12,105,000

Option C: $1,100,000

Option D: $11,000,000

Correct Answer: $11,000,000 ✔

Option A: 13.75%

Option B: 11.65%

Option C: 12.50%

Option D: 13.50%

Correct Answer: 12.50% ✔

Option A: discounting period

Option B: investment period

Option C: payback period

Option D: earning period

Correct Answer: payback period ✔

Option A: net initial investment

Option B: cash flow from operations after paying taxes

Option C: cash flow from terminal disposal after paying taxes

Option D: all of above

Correct Answer: all of above ✔

Option A: $596,300

Option B: $485,300

Option C: $496,250

Option D: $486,250

Correct Answer: $496,250 ✔

Option A: $5,645,000

Option B: $6,442,500

Option C: $3,442,500

Option D: $5,442,500

Correct Answer: $3,442,500 ✔

Option A: 3.34 years

Option B: 4.34 years

Option C: 5.34 years

Option D: 6.34 years

Correct Answer: 3.34 years ✔

Option A: discounting period

Option B: investment period

Option C: payback period

Option D: earning period

Correct Answer: payback period ✔

Option A: lead value of money

Option B: storage value of money

Option C: time value of money

Option D: cash value of money

Correct Answer: time value of money ✔

Option A: 27.28%

Option B: 25.28%

Option C: 22.28

Option D: 21.28

Correct Answer: 25.28% ✔

Option A: project dimension

Option B: accounting-period dimension

Option C: back-flush accounting dimension

Option D: lean accounting dimension

Correct Answer: accounting-period dimension ✔

Option A: lead budgeting

Option B: lean budgeting

Option C: capital budgeting

Option D: relevant budgeting

Correct Answer: capital budgeting ✔

Option A: internal rate of return

Option B: accrual accounting rate of return

Option C: net present value

Option D: all of above

Correct Answer: all of above ✔

Option A: accrual accounting rate of return

Option B: returned working capital

Option C: increase in expected average annual

Option D: decrease in expected average annual

Correct Answer: accrual accounting rate of return ✔

Option A: real rate of return

Option B: required rate of return

Option C: nominal rate of return

Option D: none of above

Correct Answer: real rate of return ✔

Option A: project dimension

Option B: accounting-period dimension

Option C: back-flush accounting dimension

Option D: lean accounting dimension

Correct Answer: project dimension ✔

Option A: cash flow from operations

Option B: terminal disposal of investment

Option C: net initial investment

Option D: average return on investment

Correct Answer: net initial investment ✔

Option A: net investment parity

Option B: inflation

Option C: purchasing parity

Option D: buying parity

Correct Answer: inflation ✔