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. 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.

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

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

  4. 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

  5. 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 .

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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.

  11. 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.

  12. The article was up to the point and described the information about education and learning. Thanks to blog author for wonderful and informative post. Hemp Shop

  13. For financial purpose find the stock broker firms in India, those will invest properly

  14. Nice post about capital budgeting. Keep it up; Meanwhile, if you are looking for a Magento development company to build your online store, then there is no better choice than Techies India Inc.

  15. SAP affirmation is turning out to be progressively significant to workers and organizations as SAP keeps on adding new applications, apparatuses and interfaces for virtually every area of business the executives. You can get this declaration as a part of a degree or through an independent course. The SAP course incorporates a few modules between key to specialized sorts covering practically all parts of business the board. It gives the ability to oversee SAP business by configuration, including hierarchical design arrangement, broadening arrangements and that's only the tip of the iceberg. SAP-ensured experts can fabricate data stockrooms, plan input screens and oversee information bases.
    SAP Course in Pune

  16. Enjoy reading the article above, it really explains everything in detail about buy credit analysis report, the article is very interesting and effective. Thank you and good luck with the upcoming article

  17. I enjoyed reading this. Thanks for sharing and keep writing. Do you know how to download premium free apps on iOS? if not, Then in know one site about appyeet, the Apple users can easily download the apps from Appyeet platforms, such as iPhones, iPad, and iPods. for more info, I recommend read our blog about Appyeet. it will help you to unlock the premium features on our devices.

  18. Great article.If you want to know how to unblocked minecraft in school? If no the I would like to suggest our article about Unblocked Minecraft accepting your School has a blocker for forbidden games and sites; with the Node unblocker, you will unblock everything.

  19. Nice post,

    If you are new to cloud computing, the AWS cloud practitioner certification exam is a good place to start. The AWS Certified Cloud Practitioner exam is the foundational level certification, designed for entry-level professionals. If you wish to take the AWS cloud practitioner exam, you may prepare by enrolling in the AWS certified cloud practitioner practise exam. Become the in-house AWS Cloud specialist and lead your team on cloud initiatives. Learn from AWS courses in Pune

  20. AWS Educate offers AWS Educate Cloud Career Pathways, which serve as a roadmap to launching a career in the cloud. AWS education may be a helpful resource for IT students interested in learning more about AWS and the cloud.
    Learn from AWS courses in Pune and expand your expertise to help your organization's cloud adoption and goals.

  21. Thanks for sharing this amazing and informative post. keep sharing with us.
    western leather jackets for men

  22. Thanks for sharing this valuable information with us.

  23. Great post, thanks for sharing valuable information about budget , keep posting more. Software Testing Classes in Pune

  24. Thanks for the article, its really very useful.

  25. This comment has been removed by the author.

  26. At APTRON Solutions Noida, we understand the importance of practical, hands-on learning. Our Javascript Training in Noida curriculum is carefully crafted to provide a perfect blend of theoretical knowledge and real-world application. With our industry-expert trainers, you'll gain a deep understanding of JavaScript concepts, along with valuable insights into best practices and industry trends.

  27. Great post we are one of the best blacksmith anvils in the market right now

  28. This list of clothing brands for men is a great resource for guys looking to upgrade their style. I appreciate the variety of brands mentioned, catering to different tastes and budgets.
    women leather trench coat

  29. I'm intrigued by the brands that focus on sustainable and ethical fashion. It's refreshing to see a commitment to environmental and social responsibility in the fashion industry.
    Women Leather Jumpsuits and Rompers

  30. It's nice to see a mix of well-known brands and some that might be lesser-known but still offer quality and style. This list feels comprehensive and well-researched.
    Men leather blazers

  31. Thanks for sharing the information. Please click here SD-WAN TRAINING

  32. When discussing a well-ordered and excellent site, this site must be counted. click on this link if you want to know more about GOTV and how to pay

  33. Great post, thanks for sharing valuable information about budget , keep posting more.


  34. Nice Post, Thanks For Sharing. Keep Posting 👍👍

    Visit: CCNP (350-401) Training in Pune

  35. Great post, thanks for sharing valuable information about budget , keep posting more.

  36. WebAsha Technologies is Leading Towards Becoming One of The Best Training Companies in India, USA & UK”.

    Visit: Linux Training in Mumbai

  37. I wanted to thank you for this great read
    Please take some time to visit mine...
    sap course in pune


  38. Starting a company in India involves several steps. First, you need to choose the type of business structure (such as a PPrivate limited Company Registration in India, LLP, etc.). Next, you must obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN). Following this, you will need to register the company name with the Ministry of Corporate Affairs (MCA). Once approved, you can proceed with filing the incorporation documents and paying the registration fees. For a detailed guide on Section 8 Company Registration online , you can check out this comprehensive resource.


Post a Comment