Description : An assumption that implies that finite numbers of choices are available to a decision-maker and the decision variables do not assume negative values is known as _______ a. Certainty b. Continuity c. Finite choices d. None of the above
Last Answer : c. Finite choices
Description : The estimated benefits from a capital budgeting project are expected as cash flows rather than income flows because . A. it is more difficult to calculate income flows than cash flows B. it ... is central to the firm's capital budgeting decision C. this is required by the accounting profession
Last Answer : B. it is cash, not accounting income, that is central to the firm's capital budgeting decision
Description : Which of the following is not followed in capital budgeting? A. Cash flows principle B. Interest exclusion principle C. Accrual principle D. Post tax principle
Last Answer : C. Accrual principle
Description : Capital budgeting decisions are based on: A. Incremental profit B. Incremental cash flows C. Incremental assets D. Incremental capital
Last Answer : B. Incremental cash flows
Description : A sound capital budgeting technique is based on: A. Cash Flows B. Accounting Profit C. Interest rate on borrowings D. Last dividend paid
Last Answer : A. Cash Flows
Description : Which of the following is not used in capital budgeting? A. B. C. D. Time Value of Money Sensitivity Analysis Net Assets Value Method Cash Flows
Last Answer : Net Assets Value Method
Description : The basic capital budgeting principles involved in determining relevant after-tax incremental operating cash flows require us to . A. include sunk costs, but ignore opportunity costs B. include ... C. ignore both opportunity costs and sunk costs D. include both opportunity and sunk costs
Last Answer : B. include opportunity costs, but ignore sunk costs
Description : All of the following influence capital budgeting cash flows except . A. choice of depreciation method for tax purposes B. economic length of the project C. projected sales (revenues) for the project
Last Answer : B. economic length of the project
Description : In proper capital budgeting analysis we evaluate incremental cash flows. A. accounting B. operating C. before-tax D. financing
Last Answer : B. operating
Description : ......................... deals with making sound decisions under conditions of certainty, risk and uncertainty. a. Game theory b. Network analysis c. Decision theory d. None of these
Last Answer : c. Decision theory
Description : Which of the following best expresses the difference between programmed and non-programmed decisions? (a) Occur under certainty or risk; occur under uncertainty or ambiguity (b) Made by managers ... rules cannot be developed (d) Have computer routines developed for them; are not computerized
Last Answer : (c) Handled with decision rules; decision rules cannot be developed
Description : To the nearest rupee, what is the net present value of a replacement project whose cash flows are -Rs.104,000; Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 0 through 4, respectively? The firm has decided to ... -free rate is 6%. A. Rs.15,115 B. Rs.26,798 C. Rs.33,346 D. Rs.48,121
Last Answer : C. Rs.33,346
Description : Which one is the principle of capital structure? A. Cost principle B. Risk principle C. Control principle D. All of these
Last Answer : D. All of these
Description : Which of the following statements is not correct? A. For the purpose of Funds Flow Statement, the term 'fund ' generally refers to net working capital B. Funds flow is a wider concept than ... business D. The capitalisation of reserves by the issue of bonus shares also involves flow of funds
Last Answer : D. The capitalisation of reserves by the issue of bonus shares also involves flow of funds
Description : Which is the type of dividend? A. Cash Dividend B. Interest C. Profit cum-reserve D. Flexible Capital
Last Answer : A. Cash Dividend
Description : Which of the following is not a capital budgeting decision? A. Expansion programme B. Merger C. Replacement of an Asset D. Inventory Level
Last Answer : D. Inventory Level
Description : Capital budgeting is a part of: A. Investment decision B. Working capital management C. Marketing management D. Capital structure
Last Answer : A. Investment decision
Description : ------------ is a condition in which the decision maker chooses a course of action without complete knowledge of the consequences that will follow implementation. (a) Risk ; (b) Uncertainty ; (c) Ambiguity ; (d) Accuracy
Last Answer : (b) Uncertainty ;
Description : Currency Swap is an instrument to manage _______ A. currency risk B. interest rate risk C. currency and interest rate risk D. cash flows in different currency E. All of the above
Last Answer : D. cash flows in different currency Explanation: A currency swap (or a cross currency swap) is a foreign exchange derivative between two institutions to exchange the principal and/or interest payments of a loan in one currency for equivalent amounts, in net present value terms, in another currency.
Description : Currency swap is an instrument to manage _______ A. Interest Rate Risk B. Currency Risk C. Cash flows in different countries D. All of the Above E. None of the Above
Last Answer : C. Cash flows in different countries Explanation: A currency swap (or a cross currency swap) is a foreign exchange derivative between two institutions to exchange the principal and/or interest ... loan in one currency for equivalent amounts, in net present value terms, in another currency.
Description : Which of the following is most likely to be considered a risk factor relating to fraudulent financial reporting? a. Domination of management by top executives. b. Negative cash flows from operations. c. Large amounts of cash processed. d. Small high-dollar inventory items
Last Answer : Negative cash flows from operations.
Description : Small items like, pencils, pens, files, etc. are written off within a year according to _ concept. a) Materiality b) consistency c) Conservatism d) Realisation
Last Answer : a) Materiality
Description : 45. LP is a major innovations since _______ in the field of business decision-making, particularly under conditions of certainty a. Industrial Revolution b. World War I c. World War II d. French Revolution
Last Answer : c. World War II
Description : Decision making under certainty refers to .............................. situation. a. Deterministic b. Probabilistic c. Competitive d. None of these
Last Answer : a. Deterministic
Description : A situation in which one of two or more risk events will follow an act, but the precise nature of these events may not be known and the probabilities of their occurring cannot be objectively assigned, is ... 1. certainty 2. uncertainty 3. risk 4. risk adversity 5. None of the above.
Last Answer : 2. uncertainty
Description : If a manager at Wipro wants to award a contract for printing the company's promotional literature and has obtained quotations from several printers, the manager can select a printer and know with ______ what the printing should cost. (a) Ambiguity ; (b) Risk ; (c) Uncertainty ; (d) Certainty
Last Answer : (d) Certainty
Description : Cash discount allowed to a debtor should be credited to a) Discount account b)Customer’s account c) Sales account d) Cash account
Last Answer : b)Customer’s account
Description : Rent paid to landlord should be credited to a) Landlords account b) Rent account c)Cash account d) Expense account
Last Answer : c)Cash account
Description : Sales made to Mahesh for cash should be debited to________________ a) Cash account b) Mahesh Account c) Sales account d) Purchase account
Last Answer : a) Cash account
Description : Cash A/c is a ________ A/c. a) Personal b) Real c) Nominal d) None
Last Answer : b) Real
Description : Cash a/c is a ______ a) Real a/c b) Nominal c) Personal d) None
Last Answer : a) Real a/c
Description : Which of the following is not a Real Account? a) Cash A/c b) Investments A/c c) Out standing rent A/c d) Purchases A/c
Last Answer : c) Out standing rent A/c
Description : If wages are paid for construction of business premises ______ A/c is credited and _____ A/c is debited. a) Wages, Cash b) Premises, Cash c) Cash, Wages d) Cash, Premises
Last Answer : d) Cash, Premises
Description : Fixed assets are held by business for _____ a) Converting into cash b) Generating revenue c) Resale d) None of the above
Last Answer : b) Generating revenue
Description : A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is followed by him? a) Going concern b) Cost c) Accrual
Last Answer : c) Accrual
Description : Bonus shares can be issued by a company A. Out of the Reserves created by revaluation of fixed assets B. Out of share premium not collected in cash C. Without any provision for it in the Articles of Association of the company D. Out of free reserves built out of genuine profit
Last Answer : D. Out of free reserves built out of genuine profit
Description : Which is the form of dividend? A. Cash dividend B. Bond dividend C. Stock dividend D. All of these
Description : Liquidator‘s statement of receipt and payment is known as A. Cash flow statement B. Deficiency a/c C. Statement of affairs D. Liquidator‘s final statement of A/c
Last Answer : D. Liquidator‘s final statement of A/c
Description : Discounted cash flow criteria for investment appraisal does not include A. Not present value B. Benefit cost ratio C. Accounting rate of return D. Internal rate of return
Last Answer : B. Benefit cost ratio
Description : Which is true for existing Economic and Industrial policies of Indian Government ? (i) FERA was abolished (ii) MRTP was abolished (iii) Cash compensatory support for export was abolished (iv) Industrial Licensing (except a few ... (iii) and (iv) C. Only (iii) and (iv) D. Only (ii) and (iii)
Last Answer : C. Only (iii) and (iv)
Description : Which among the following is not the instrument of monetary policy A. Deficit financing B. Statutory liquidity Ratio C. Cash reserve ratio D. Open market operation
Last Answer : A. Deficit financing
Description : If the intrinsic values of shares exchanged are not equal, the difference is paid in ........... (A)Cash (B)Debenture (C)Pref. share (D)Assets
Last Answer : (A)Cash
Description : You must decide between two mutually exclusive projects. Project A has cash flows of - Rs.10,000; Rs.5,000; Rs.5,000; and Rs.5,000; for years 0 through 3, respectively. Project B has cash flows of -Rs ... B's NPV > Project A's NPV. D. Neither A nor B; The NPVs of both projects are negative.
Last Answer : C. B; Project B's NPV > Project A's NPV.
Description : Assume that a firm has accurately calculated the net cash flows relating to two mutua lly exclusive investment proposals. If the net present value of both proposals exceed zero and the firm is ... maximize shareholder wealth and, since the projects are mutually exclusive, we can only take one
Last Answer : D. accept the proposal that has the largest NPV since the goal of the firm is to maximize shareholder wealth and, since the projects are mutually exclusive, we can only take one
Description : Probability sampling implies: (A) Stratified Random Sampling (B) Systematic Random Sampling (C) Simple Random Sampling (D) All of the above
Last Answer : (D) All of the above
Description : Matching concept means A] Assets = capital + liabilities B] Transactions recorded at accrual concept C] Anticipate no profit but recognize all losses D] Expenses should be matched with the revenue of the period.
Last Answer : D] Expenses should be matched with the revenue of the period.
Description : Mr. X is a dealer in electronic goods (refrigerator, washing machine, air conditioners, televisions, etc.) He purchased two air conditioners and installed in his showroom. In the books of X the ... will be debited to A] Drawing account B] Capital Account C] Fixedassets D] Purchases account
Last Answer : C] Fixedassets
Description : Which of the following is a Real A/c? a) Building A/c b) Capital A/c c) Shyam A/c d) Rent A/c
Last Answer : a) Building A/
Description : Capital A/c is a _______ A/c. a) Personal b) Real c) Nominal d) None
Last Answer : a) Personal
Description : Fixed assets are double the current assets and half the capital. The current assets are Rs.3,00,000 andinvestments are Rs.4,00,000. Then the current liabilities recorded in balance sheet will be a) 2,00,000 b) 1,00,000 c) 3,00,000 d) 4,00,000
Last Answer : b) 1,00,000