WorksheetsCapital Budgeting
Total questions: 10
Worksheet time: 18mins
Finance Functions are
Planning for funds
Raising of funds
Allocation of resources
All the above
The Primary goal of financial management is
to maximise return
to minimize risk
to maximize the wealth of owners
to maximize profit
The process of calculating present value of future cash flows
compounding
discounting
both compounding and discounting
none of the above
what will be the present value of Rs.40,00,000 receivable at the end of 3 years at an interest rate 7%
(a)
A _____________________ is a report of the balances in all assets, liability, and owner's equity accounts at the end of a accounting period
statement of cash flows
balance sheet
income statement
financial statement
What is the Payback Period in capital budgeting?
The Payback Period is the internal rate of return of a project
The Payback Period in capital budgeting is the time it takes for a project to recoup its initial investment.
The Payback Period is the total revenue generated by a project
The Payback Period is the net present value of a project
What is the Profitability Index (PI) and how is it calculated?
PI = Operating Income / Initial Investment
PI = Present Value of Future Cash Flows / Initial Investment
PI = Net Income / Initial Investment
PI = Total Revenue / Initial Investment
A set of projects in which the acceptance of one project means that the others cannot be accepted
Replacement Decision
Expansion Decision
Independent Projects
Mutually Exclusive Projects
If the current Yield of government Bond is 5% and the risk is 3% then Risk Adjusted Discounting Rate is _____
8%
2%
11%
15%
A project costs 25,000 rupees , scrap value 5000 rupees , life of the project 5 years and annual average income before depreciation and tax 7,200 rupees. Assuming the tax rate at 50% and depreciation on straight line basis. Calculate ARR.
(a)
