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MCQs

Cash Flow Statement

Total Questions : 118 | Page 8 of 12 pages
Question 71. The present value of future cash flows is divided by an initial cost of the project to calculate
  1.    negative index
  2.    exchange index
  3.    project index
  4.    profitability index
 Discuss Question
Answer: Option D. -> profitability index
Answer: (d).profitability index
Question 72. The cash flows occurring with more than one change in sign of cash flow are classified as
  1.    non-normal cash flow
  2.    normal cash flow
  3.    normal costs
  4.    non-normal costs
 Discuss Question
Answer: Option A. -> non-normal cash flow
Answer: (a).non-normal cash flow
Question 73. The first step in calculation of net present value is to find out
  1.    present value of equity
  2.    future value of equity
  3.    present value cash flow
  4.    future value of cash flow
 Discuss Question
Answer: Option C. -> present value cash flow
Answer: (c).present value cash flow
Question 74. The situation in which one project is accepted while rejecting an other project in comparison is classified as
  1.    present value consent
  2.    mutually exclusive
  3.    mutual project
  4.    mutual consent
 Discuss Question
Answer: Option B. -> mutually exclusive
Answer: (b).mutually exclusive
Question 75. If the net present value is positive then the profitability index will be
  1.    greater than two
  2.    equal to
  3.    less than one
  4.    greater than one
 Discuss Question
Answer: Option D. -> greater than one
Answer: (d).greater than one
Question 76. An operating cash flows is $12000 and the gross fixed asset expenditure is $5000 then the free cash flow will be
  1.    −$7000
  2.    7000
  3.    17000
  4.    −$17000
 Discuss Question
Answer: Option B. -> 7000
Answer: (b).7000
Question 77. An analysis and estimation of cash flows include
  1.    input data and key output
  2.    depreciation schedule
  3.    net salvage values
  4.    all of the above
 Discuss Question
Answer: Option D. -> all of the above
Answer: (d).all of the above
Question 78. The cost which has occurred already and not affected by decisions is classified as
  1.    sunk cost
  2.    occurred cost
  3.    weighted cost
  4.    mean cost
 Discuss Question
Answer: Option A. -> sunk cost
Answer: (a).sunk cost
Question 79. The cash flow which starts negative then positive then again positive cash flow is classified as
  1.    normal costs
  2.    non-normal costs
  3.    non-normal cash flow
  4.    normal cash flow
 Discuss Question
Answer: Option C. -> non-normal cash flow
Answer: (c).non-normal cash flow
Question 80. An increase in marginal cost of capital and the capital rationing are two arising complications of
  1.    maximum capital budget
  2.    greater capital budget
  3.    optimal capital budget
  4.    minimum capital budget
 Discuss Question
Answer: Option C. -> optimal capital budget
Answer: (c).optimal capital budget

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