Capital Budgeting

  1. Capital Budgeting is a part of:
    1. Investment Decision
    2. Working Capital Management
    3. Marketing Management
    4. Capital Structure
  2. Capital Budgeting deals with:
    1. Long-term Decisions
    2. Short-term Decisions
    3. Both (a) and (b)
    4. Neither (a) nor (b)
  3. Which of the following is not used in Capital Budgeting?
    1. Time Value of Money
    2. Sensitivity Analysis
    3. Net Assets Method
    4. Cash Flows
  4. Capital Budgeting Decisions are:
    1. Reversible
    2. Irreversible
    3. Unimportant
    4. All of the above
  5. Which of the following is not incorporated in Capital Budgeting?
    1. Tax-Effect
    2. Time Value of Money
    3. Required Rate of Return
    4. Rate of Cash Discount
  6. Which of the following is not a capital budgeting decision?
    1. Expansion Programme
    2. Merger
    3. Replacement of an Asset
    4. Inventory Level
  7. A sound Capital Budgeting technique is based on:
    1. Cash Flows
    2. Accounting Profit
    3. Interest Rate on Borrowings
    4. Last Dividend Paid
  8. Which of the following is not a relevant cost in Capital Budgeting?
    1. Sunk Cost
    2. Opportunity Cost
    3. Allocated Overheads
    4. Both (a) and (c) above
  9. Capital Budgeting Decisions are based on:
    1. Incremental Profit
    2. Incremental Cash Flows
    3. Incremental Assets
    4. Incremental Capital
  10. Which of the following does not effect cash flows proposal?
    1. Salvage Value
    2. Depreciation   Amount
    3. Tax   Rate Change
    4. Method of Project Financing
  11. Cash Inflows from a project include:
    1. Tax Shield of Depreciation
    2. After-tax Operating Profits
    3. Raising of Funds
    4. Both (a) and (b)
  12. Which of the following is not true with reference capital budgeting?
    1. Capital budgeting is related to asset replacement decisions
    2. Cost   of   capital   is equal to minimum required return
    3. Existing investment in a project is not treated as sunk cost
    4. Timing of cash flows is relevant.
  13. Which of the following is not followed in capital budgeting?
    1. Cash flows Principle
    2. Interest Exclusion Principle
    3. Accrual Principle
    4. Post-tax Principle
  14. Depreciation is incorporated in cash flows because it:
    1. Is unavoidable cost
    2. Is a cash flow
    3. Reduces Tax liability
    4. Involves an outflow
  15. Which of the following is not true for capital budgeting?
    1. Sunk costs are ignored
    2. Opportunity costs are excluded
    3. Incremental cash flows are considered
    4. Relevant cash flows are considered
  16. Which of the following is not applied in capital budgeting?
    1. Cash flows be calculated in incremental terms
    2. All costs and benefits are measured on cash basis
    3. All accrued costs and revenues be incorporated
    4. All benefits are measured on after-tax basis.
  17. Evaluation of Capital Budgeting Proposals is based on Cash Flows because:
    1. Cash Flows are easy to calculate
    2. Cash Flows are suggested by SEBI
    3. Cash is more important than profit
    4. None of the above
  18. Which of the following is not included in incremental A flows?
    1. Opportunity Costs
    2. Sunk  Costs
    3. Change  in   Working Capital
    4. Inflation effect
  19. A proposal is not a Capital Budgeting proposal if it:
    1. is related to Fixed Assets
    2. brings long-term benefits
    3. brings short-term benefits only
    4. has very large investment
  20. In Capital Budgeting, Sunk cost is excluded because it is:
    1. of small amount
    2. not incremental
    3. not reversible
    4. All of the above
  21. Savings in respect of a cost is treated in capital budgeting as:
    1. An Inflow
    2. An Outflow
    3. Nil
    4. None of the above.
  22. Risk in Capital budgeting implies that the decision-maker knows___________of the cash flows.
    1. Variability
    2. Probability
    3. Certainty
    4. None of the above
  23. In Certainty-equivalent approach, adjusted cash flows are discounted at:
    1. Accounting Rate of Return
    2. Internal Rate of Return
    3. Hurdle Rate
    4. Risk-free Rate
  24. Risk in Capital budgeting is same as:
    1. Uncertainty of Cash flows
    2. Probability of Cash flows
    3. Certainty of Cash flows
    4. Variability of Cash flows
  25. Which of the following is a risk factor in capital budgeting?
    1. Industry specific risk factors
    2. Competition risk factors
    3. Project specific risk factors
    4. All of the above
  26. In Risk-Adjusted Discount Rate method, the normal rate of discount is:
    1. Increased
    2. Decreased
    3. Unchanged
    4. None  of  the above
  27. In Risk-Adjusted Discount Rate method, which one is adjusted?
    1. Cash flows
    2. Life of the proposal
    3. Rate of discount
    4. Salvage value
  28. NPV of a proposal, as calculated by RADR real CE Approach will be:
    1. Same
    2. Unequal
    3. Both (a) and (b)
    4. None of (a) and (b)
  29. Risk of a Capital budgeting can be incorporated
    1. Adjusting the Cash flows
    2. Adjusting the Discount Rate
    3. Adjusting the life
    4. All of the above
  30. Which element of the basic NPV equation is adjusted by the RADR?
    1. Denominator
    2. Numerator
    3. Both
    4. None
  31. In CE Approach, the CE Factors for different years are:
    1. Generally increasing
    2. Generally decreasing
    3. Generally same
    4. None of the above
  32. Which of the following is correct for RADR?
    1. Accept a project if NPV at RADR is negative
    2. Accept a project if IRR is more than RADR
    3. RADR is overall cost of capital plus risk-premium
    4. All of the above
  33. In Payback Period approach to risk the target payback period is
    1. Not   adjusted
    2. Adjusted upward
    3. Adjusted downward
    4. B or C
  34. In Sensitivity Analysis, the emphasis is on assessment of sensitivity of
    1. Net Economic Life
    2. Net Present Value
    3. Both (a) and (b)
    4. None of (a) and (b)
  35. Most Sensitive variable as given by the Sensitivity Analysis should be:
    1. Ignored
    2. Given Least important
    3. Given the maximum importance
    4. None of the above
  36. Expected Value of Cashflow, EVCF, is:
    1. Certain to occur
    2. Most likely Cashflows
    3. Arithmetic Average Cashflow
    4. Geometric Average Cashflow
  37. Concept of joint probability is used in case of:
    1. Independent Cashflows
    2. Uncertain Cashflows
    3. Dependent Cashflows
    4. Certain Cashflows
  38. Decision-tree approach is used in:
    1. Proposals with longer life
    2. Sequential decisions
    3. Independent Cashflows
    4. Accept-Reject Proposal


  1. I feel really happy to have seen your webpage and look forward to so many more entertaining times reading here. Thanks once more for all the details.
    Best Project Management Software

  2. IEEE Project Domain management in software engineering is distinct from traditional project deveopment in that software projects have a unique lifecycle process that requires multiple rounds of testing, updating, and faculty feedback. A IEEE Domain project Final Year Projects for CSE system development life cycle is essentially a phased project model that defines the organizational constraints of a large-scale systems project. The methods used in a IEEE DOmain Project systems development life cycle strategy Project Centers in India provide clearly defined phases of work to plan, design, test, deploy, and maintain information systems.

    This is enough for me. I want to write software that anyone can use, and virtually everyone who has an internet connected device with a screen can use apps written in JavaScript. JavaScript Training in Chennai JavaScript was used for little more than mouse hover animations and little calculations to make static websites feel more interactive. Let’s assume 90% of all websites using JavaScript use it in a trivial way. That still leaves 150 million substantial JavaScript Training in Chennai JavaScript applications.

  3. That is very interesting; you are a very skilled blogger. I have shared your website in my social networks! A very nice guide. I will definitely follow these tips. Thank you for sharing such detailed article.

    Best Project Management Software

  4. Very informative article you shared here. After reading your article, I got a lot of information and if anyone looking for Project Management Consultancy Services then, Turlon provide the expertise to get you “up and running” with our services.

  5. Thanks for shared that blog with us. If anyone here searching Property Depreciation Schedule then visit AussieQS.

  6. Good Post! Thank you so much for sharing this pretty post, it was so good to read and useful to improve my knowledge as updated one, keep blogging…
    Distribution Management Software

  7. Let see if it helps or not...

  8. IEEE Final Year Project centers make amazing deep learning final year projects ideas for final year students Final Year Projects for CSE to training and develop their deep learning experience and talents.

    IEEE Final Year projects Project Centers in India are consistently sought after. Final Year Students Projects take a shot at them to improve their aptitudes, while specialists like the enjoyment in interfering with innovation.

    corporate training in chennai corporate training in chennai

    corporate training companies in india corporate training companies in india

    corporate training companies in chennai corporate training companies in chennai

    I have read your blog its very attractive and impressive. I like it your blog. Digital Marketing Company in Chennai

  9. Good Post! Thank you so much for sharing this pretty post, it was so good to read and useful to improve my knowledge as updated one, keep blogging.
    kiss day images
    valentines day messages

  10. Nice information, I am heartily very obliged to you for providing dividend knowledge. This information will always help everyone for gaining knowledge. Always keep sharing. Thanks once again. Importance of trading with regulated brokers

  11. Nice content, It is definitely very helpful for my professional workers. I having many kinds of knowledge from your blog..
    If you require any information regarding company registration online bangalore
    then plz click on it .

  12. Excellent read, Positive site, I have read a few of the articles on your website now, and I really like your style. I really appreciate your work.If you require aboutTax Return Filing in bangalore | ConsultantsGST Return Filing Services in bangalore please click on it.

  13. After a long time, I read a very beautiful and very important article that I enjoyed reading. I have found that this article has many important points, I sincerely thank the admin of this website for sharing it. Best asset recovery firm service provider.

  14. Our headquarter is in Philadelphia, PA. We have a global existence, operating in the USA, UK, Asia, and Australia. We are serving our clients all over the globe. Regardless of different time zones, our team manages to facilitate philadelphia seo and collaborate with them to deliver high-quality services.

  15. We are the leading provider of quality tires tire shop near me and exceptional services in New Castle for 25 years. We have 2 service centers that offer a range of services from an oil change, tire replacement to everything your vehicle needs, and delight our customers.

  16. Dr. Ralph’s Automotive Services was established in 1976 by Ralph Sposato and is operated by himself body repair shop near me cheap and his son, Franco. Ralph’s passion for cars and automotive technology started at a young age. He was determined to be a great mechanic.

  17. Our doctors has a personable hormone therapy for weight loss and intimate rapport with her patients throughout their inner and outer health journey. She has enjoyed counseling patients and has addressed patients beyond the scope of traditional gynecology. In addition, Our doctors for men in addressing their hormonal imbalances.

  18. Who Are the Best Lawyers in area of Philadelphia law offices near me and New Jersey History? Search Philadelphia Best Lawyers® Best Philadelphia Law Firms rankings for firms near you by using our website search bar.

  19. The goal of Williamson Caterers is to meet Catering Services and exceed our clients’ expectations and make certain that our clients’ enjoy their event as much as their guests.

  20. With prices starting at just £3.99 - our starters are the perfect start to a meal at Khyber Pass. The distinctive flavour of our food cannot be described by words alone! best places to eat near me

  21. Looking for all the latest styles of jackets peter quill costume and coats for men? Shop the best collection of men's jackets and coats. Free shipping available.

  22. WorldClassJackets is serving several customers currently. Our customer products range from Hikers, climbers, skiers, snowboarders, bikers to mountaineers’ jackets, and many other categories both in males aquaman shearling jacket and females. worldclassjackets cooperate with the premium courier services working internationally across the globe to bring you the best and efficient shipping and delivery solutions.


Post a Comment