MCQ On Basics Of Capital Budgeting Evaluating Cash Flows

5 Questions | Total Attempts: 448

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MCQ On Basics Of Capital Budgeting Evaluating Cash Flows

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Questions and Answers
  • 1. 
    Project whose cash flows are more than capital invested for rate of return then net present value
    • A. 

      Positive

    • B. 

      Independent

    • C. 

      Negative

    • D. 

      Zero

  • 2. 
    In mutually exclusive projects, project which is selected in comparison to other must have
    • A. 

      Higher net present value

    • B. 

      Lower net present value

    • C. 

      Zero net present value

    • D. 

      All of above

  • 3. 
    Relationship between Economic Value Added (EVA) and Net Present Value (NPV) is considered as
    • A. 

      Valued relationship

    • B. 

      Economic relationship

    • C. 

      Direct relationship

    • D. 

      Inverse relationship

  • 4. 
    Uncovered cost at start of year is $200, full cashflow during recovery year is $400 and prior years to full recovery is 3 then payback is
    • A. 

      5 years

    • B. 

      3.5 years

    • C. 

      4 years

    • D. 

      4.5 years

  • 5. 
    In capital budgeting, positive net present value results in
    • A. 

      Negative economic value added

    • B. 

      Positive economic value added

    • C. 

      Zero economic value added

    • D. 

      Percent economic value added

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