Lakshya Education MCQs

Question: 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
Answer: Option C

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Question 1. 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?
  1.    5 years
  2.    7 years
  3.    12 years
  4.    10 years
Answer: Option A
Question 2. 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 3. 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 4. 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 5. 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
Question 6. In a manufacturing industry, break even point occurs, when the
  1.    Total annual rate of production equals the assigned value
  2.    Total annual product cost equals the total annual sales
  3.    Annual profit equals the expected value
  4.    Annual sales equals the fixed cost
Answer: Option B

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