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1. Which of the following Methods is not the Correct Index to make Capital Budgeting Investment Decisions? Profitability Index Internal Rate of Return Risk of Return 2. Let Minimum acceptable Rate of Return be x %. Let a Project A has Rate of Return Ra and Net Present Value Na. Then Project Will be Accepted if: x >Ra , NPV >Ra Ra>x , NPV >0 NPV > x , x>0 3. Which of the Following is not the Disadvantage of NPV Method ? It Does not account for real world Risks involved with undertaking a new project. Increasing the discount rate to compensate for additional Risks can pose problems if a project has negative cash flows at some point. It Provides the relative comparison of Internal Rate of Return with desired rate of return 4. If in NPV Calculation, Rate of Return is equal to Internal Rate of Return, Then Which of the following Condition holds? IRR greater than 1 IRR less than 1 NPV = 0 5. Which of the following methods is adopted in Monte Carlo Simulation to Forecast the Values? Forecasting by Historical Results Obtained Forecasting by Fixed Inputs generated by User Forecasting by Repeated Random Number Sampling 6. Which of the Following are Taken in Consideration while Reviewing BOT Projects? Financial benefits and Profits Economic Viability Benefit – Cost Analysis 7. Which of the Following methods provide Relative Value of Comparison between Projects? Cost Benefit Ratio PI [ Profitability Index ] Both (a) and (b) 8. Which of the following does not involve time value of money? IRR Payback period PI [ Profitability Index ] 9. Which method is better suited for long term project investments in case of varying discount rates? NPV IRR Accounting Rate Of Return 10. What of the following measures relative value of an investment? NPV PI All of the Above
1. Which of the following Methods is not the Correct Index to make Capital Budgeting Investment Decisions?
Profitability Index
Internal Rate of Return
Risk of Return
2. Let Minimum acceptable Rate of Return be x %. Let a Project A has Rate of Return Ra and Net Present Value Na. Then Project Will be Accepted if:
x >Ra , NPV >Ra
Ra>x , NPV >0
NPV > x , x>0
3. Which of the Following is not the Disadvantage of NPV Method ?
It Does not account for real world Risks involved with undertaking a new project.
Increasing the discount rate to compensate for additional Risks can pose problems if a project has negative cash flows at some point.
It Provides the relative comparison of Internal Rate of Return with desired rate of return
4. If in NPV Calculation, Rate of Return is equal to Internal Rate of Return, Then Which of the following Condition holds?
IRR greater than 1
IRR less than 1
NPV = 0
5. Which of the following methods is adopted in Monte Carlo Simulation to Forecast the Values?
Forecasting by Historical Results Obtained
Forecasting by Fixed Inputs generated by User
Forecasting by Repeated Random Number Sampling
6. Which of the Following are Taken in Consideration while Reviewing BOT Projects?
Financial benefits and Profits
Economic Viability
Benefit – Cost Analysis
7. Which of the Following methods provide Relative Value of Comparison between Projects?
Cost Benefit Ratio
PI [ Profitability Index ]
Both (a) and (b)
8. Which of the following does not involve time value of money?
IRR
Payback period
9. Which method is better suited for long term project investments in case of varying discount rates?
NPV
Accounting Rate Of Return
10. What of the following measures relative value of an investment?
PI
All of the Above
