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MCQs

Cash Flow Statement

Total Questions : 118 | Page 5 of 12 pages
Question 41. The net present value, profitability index, payback and discounted payback are the methods to
  1.    evaluate cash flow
  2.    evaluate projects
  3.    evaluate budgeting
  4.    evaluate equity
 Discuss Question
Answer: Option B. -> evaluate projects
Answer: (b).evaluate projects
Question 42. The required increasing in current assets and an increasing in current liabilities is subtracted to calculate
  1.    change in net working capital
  2.    change in current assets
  3.    change in current liabilities
  4.    change in depreciation
 Discuss Question
Answer: Option A. -> change in net working capital
Answer: (a).change in net working capital
Question 43. The cash flows that could be generated from an owned asset by the company but not use in project are classified as
  1.    occurred cost
  2.    mean cost
  3.    opportunity costs
  4.    weighted cost
 Discuss Question
Answer: Option C. -> opportunity costs
Answer: (c).opportunity costs
Question 44. In capital budgeting, the cost of capital is used as discount rate and is based on pre-determines
  1.    cost of inflation
  2.    cost of debt and equity
  3.    cost of opportunity
  4.    cost of transaction
 Discuss Question
Answer: Option B. -> cost of debt and equity
Answer: (b).cost of debt and equity
Question 45. The economists consider the effects of the started project on other parts of company or on the environment of the company is called
  1.    externalities
  2.    foreign effects
  3.    weighted effects
  4.    opportunity effects
 Discuss Question
Answer: Option A. -> externalities
Answer: (a).externalities
Question 46. The net investment in operating capital is $5000 and the net operating profit after taxes is $8000 then the free cash flow would be
  1.    13000
  2.    −$3000
  3.    3000
  4.    −$13000
 Discuss Question
Answer: Option C. -> 3000
Answer: (c).3000
Question 47. In cash flow estimation, the depreciation shelters company's income from
  1.    expansion
  2.    salvages
  3.    taxation
  4.    discounts
 Discuss Question
Answer: Option C. -> taxation
Answer: (c).taxation
Question 48. The weighted average cost of debt, preferred stock and common equity is classified as
  1.    cost of salvage
  2.    cost of interest
  3.    cost of taxation
  4.    cost of capital
 Discuss Question
Answer: Option D. -> cost of capital
Answer: (d).cost of capital
Question 49. The situation in which the new business reduces an existing business of the firm is classified as
  1.    non-cannibalization effect
  2.    cannibalization effect
  3.    external effect
  4.    internal effect
 Discuss Question
Answer: Option B. -> cannibalization effect
Answer: (b).cannibalization effect
Question 50. In the cash flow estimation and risk analysis, the real rate will be equal to nominal rate if there is
  1.    no inflation
  2.    high inflation
  3.    no transactions
  4.    no acceleration
 Discuss Question
Answer: Option A. -> no inflation
Answer: (a).no inflation

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