The word budget has been derived from:
(a) Greek
(b) Latin
(c) French
(d) German
Capital Budgeting is a part of:
(a) Investment Decision
(b) Working Capital Management
(c) Marketing Management
(d) Capital Structure
Which of the following is not true?
(a) The timing of cash flows is relevant
(b) Cost of capital is equal to minimum required return
(c) Existing investment in a project is not treated as sunk cost
Related: HRM practice test paper
Which of the following is not used in investment appraisal?
(a) Time Value of Money
(b) Sensitivity Analysis
(c) Net Assets Method
(d) Cash Flows
Zero base budgeting means:
(a) no deficit in the budget
(b) a fresh budget prepared from the root
(c) starting initially with zero reserves
(d) no credit and no debit budget
Evaluation of Capital Budgeting Proposals is based on Cash Flows because:
(a) Cash Flows are easy to calculate
(b)Cash Flows are suggested by government authorities
(c) Cash is more important than profit
Capital Budgeting Decisions are:
(a) Reversible
(b) Irreversible
Which of the following is not a budgeting decision?
(a) Expansion Programme
(b) Merger
(c) Replacement of an Asset
(d) Inventory Level
Related: Objective Questions on Consumer Behavior
Which of the following is not a relevant cost in Capital Budgeting?
(a) Sunk Cost
(b) Opportunity Cost
(c) Allocated Overheads
(d) Both (a) and (c) above
Capital Budgeting Decisions are based on:
(a) Incremental Profit
(b) Incremental Cash Flows
(c) Incremental Assets
(d) Incremental Capital
Which of the following is not followed in investment appraisals?
(a) Cash flows Principle
(b) Interest Exclusion Principle
(c) Accrual Principle
(d) Post-tax Principle
In capital budgeting, the term Capital Rationing implies:
(a) That no retained earnings available
(b) That limited funds are available for investment
(c) That no external funds can be raised
(d) That no fresh investment is required in the current year
Related: world’s biggest Stock Exchange market list
Which of the following is not true for capital budgeting?
(a) Sunk costs are ignored
(b) Opportunity costs are excluded
(c) Incremental cash flows are considered
(d) Relevant cash flows are considered
Capital Budgeting deals with:
(a) Long-term Decisions
(b) Short-term Decisions
Which of the following is not applied in capital budgeting?
(a) Cash flows be calculated in incremental terms
(b) All costs and benefits are measured on a cash basis
(c) All accrued costs and revenues be incorporated
(d) All benefits are measured on an after-tax basis
A proposal is not an investment appraisal proposal if it:
(a) is related to Fixed Assets
(b) brings long-term benefits
(c) brings short-term benefits only
(d) has a very large investment
Related: general Economics quiz
Savings in respect of a cost are treated in capital budgeting as:
(a) An Inflow
(b) An Outflow
(c) Nil
Feasibility Set Approach to Capital Rationing can be applied in:
(a) Accept-Reject Situations
(b) Divisible Projects
(c) Mutually Exclusive Projects
Risk in Investment Appraisal implies that the decision-maker knows ___ of the cash flows.
(a) Variability
(b) Probability
(c) Certainty
Risk in Capital budgeting is the same as:
(a) Uncertainty of Cash flows
(b) Probability of Cash flows
(c) Certainty of Cash flows
(d) Variability of Cash flows
Related: percentage problems in aptitude
A sound Investment Appraisal technique is based on the following:
(a) Cash Flows
(b) Accounting Profit
(c) Interest Rate on Borrowings
(d) Last Dividend Paid
Which of the following is a risk factor in capital budgeting?
(a) Industry-specific risk factors
(b) Competition risk factors
(c) Project-specific risk factors
(d) All of the above
In Investment Appraisal, Sunk cost is excluded because it is:
(a) of small amount
(b) not incremental
(c) not reversible
The risk of Capital budgeting can be incorporated
(a) Adjusting the Cash flows
(b) Adjusting the Discount Rate
(c) Adjusting the life
(d) All of the above
Related: multiple choice Excel questions
Which of the following is not incorporated in investment appraisal?
(a) Tax-Effect
(b) Time Value of Money
(c) Required Rate of Return
(d) Rate of Cash Discount
Giving capital to an enterprise that has risk and adventure is called __
(a) venture capital
(b) layered financing
(c) deferred credit
(d) lease financing