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MCQs

Cash Flow Statement

Total Questions : 118 | Page 11 of 12 pages
Question 101. The graph which is plotted for projected net present value and capital rates is called
  1.    net loss profile
  2.    net gain profile
  3.    net future value profile
  4.    net present value profile
 Discuss Question
Answer: Option D. -> net present value profile
Answer: (d).net present value profile
Question 102. A modified internal rate of return is considered as present value of costs and is equal to
  1.    p.v of hurdle rate
  2.    fv of hurdle rate
  3.    p.v of terminal value
  4.    fv of terminal value
 Discuss Question
Answer: Option C. -> p.v of terminal value
Answer: (c).p.v of terminal value
Question 103. The set of projects or set of investments to maximize the firm value is classified as
  1.    optimal capital budget
  2.    minimum capital budget
  3.    maximum capital budget
  4.    greater capital budget
 Discuss Question
Answer: Option A. -> optimal capital budget
Answer: (a).optimal capital budget
Question 104. The number of years forecasted to recover an original investment is classified as
  1.    payback period
  2.    forecasted period
  3.    original period
  4.    investment period
 Discuss Question
Answer: Option A. -> payback period
Answer: (a).payback period
Question 105. The process in which the managers of the company identify projects to add value is classified as
  1.    capital budgeting
  2.    cost budgeting
  3.    book value budgeting
  4.    equity budgeting
 Discuss Question
Answer: Option A. -> capital budgeting
Answer: (a).capital budgeting
Question 106. A discount rate which is equal to the present value of TV to the project cost present value is classified as
  1.    negative internal rate of return
  2.    modified internal rate of return
  3.    existed internal rate of return
  4.    relative rate of return
 Discuss Question
Answer: Option B. -> modified internal rate of return
Answer: (b).modified internal rate of return
Question 107. In capital budgeting, the term of bond which has great sensitivity to interest rates is
  1.    long-term bonds
  2.    short-term bonds
  3.    internal term bonds
  4.    external term bonds
 Discuss Question
Answer: Option A. -> long-term bonds
Answer: (a).long-term bonds
Question 108. An uncovered cost at the start of the year is $300, full cash flow during recovery year is $650 and prior years to full recovery is 4 then payback would be
  1.    3.46 years
  2.    2.46 years
  3.    5.46 years
  4.    4.46 years
 Discuss Question
Answer: Option D. -> 4.46 years
Answer: (d).4.46 years
Question 109. The project whose cash flows are sufficient to repay the capital invested for rate of return then the net present value will be
  1.    negative
  2.    zero
  3.    positive
  4.    independent
 Discuss Question
Answer: Option B. -> zero
Answer: (b).zero
Question 110. The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be
  1.    0.55
  2.    1.82
  3.    0.55
  4.    0.0182
 Discuss Question
Answer: Option B. -> 1.82
Answer: (b).1.82

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