Lakshya Education MCQs

Question: An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the pay back time?
Options:
A.5 years
B.7 years
C.12 years
D.10 years
Answer: Option A

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More Questions on This Topic :

Question 1. For a typical project, the cumulative cash flow is zero at the
  1.    End of the project life
  2.    Break even point
  3.    Start up
  4.    End of the design stage
Answer: Option B
Question 2. A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.
  1.    300
  2.    600
  3.    800
  4.    1000
Answer: Option C
Question 3. Fixed charges for a chemical plant does not include the
  1.    Interest on borrowed money
  2.    Rent of land and buildings
  3.    Property tax, insurance and depreciation
  4.    Repair and maintenance charges
Answer: Option D
Question 4. The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is
  1.    15%
  2.    10%
  3.    1.5%
  4.    150%
Answer: Option C
Question 5. The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.
  1.    One
  2.    Three
  3.    Six
  4.    Twelve
Answer: Option A
Question 6. If the interest rate of 10% per period is compounded half yearly, the actual annual return on the principal will be __________ percent.
  1.    10
  2.    20
  3.    >20
  4.    < 20
Answer: Option C

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