Capital budgeting is a part of: A. Investment decision B. Working capital management C. Marketing management D. Capital structure

Capital budgeting is a part of:

A. Investment decision

B. Working capital management

C. Marketing management

D. Capital structure
by

1 Answer

Answer :

A. Investment decision
by

Related questions

Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account for over half of its total assets. C. Strict adherence to the maturity matching approach to financing wD. Similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months.ould call for all current assets to be financed solely with current liabilities.

Description : Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account ... the financial manager to make a decision and not address the issue again for several months.

Last Answer : B. Current assets of the typical manufacturing firm account for over half of its total assets.

Which of the following is not a capital budgeting decision? A. Expansion programme B. Merger C. Replacement of an Asset D. Inventory Level

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

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 cash, not accounting income, that is central to the firm's capital budgeting decision C. this is required by the accounting profession

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

Cost budgeting can be best described by which of the following? 1. The process of developing the future trends along with the assessment of probabilities, uncertainties, and inflation that could occur during the project 2. The process of assembling and predicting costs of a project over its life cycle 3. The process of establishing budgets, standards, and a monitoring system by which the investment cost of the project can be measured and managed 4. The process of gathering, accumulating, analyzing, reporting, and managing the costs on an on- going basis

Description : Cost budgeting can be best described by which of the following? 1. The process of developing the future trends along with the assessment of probabilities,  uncertainties, and inflation that  could ... of gathering, accumulating, analyzing, reporting, and managing the costs on an on- going basis

Last Answer : 3. The process of establishing budgets, standards, and a monitoring system by which the  investment cost of the project can be measured and managed

Which of the following is least likely to be part of the calculation of the terminal- year incremental net cash flow for an energy-related expansion project? A. An initial working capital investment is now returned as an additional cash inflow B. Disposal/reclamation costs C. Capitalized expenditures D. Salvage value of any sold or disposed assets

Description : Which of the following is least likely to be part of the calculation of the terminal- year incremental net cash flow for an energy-related expansion project? A. An initial working capital ... Disposal/reclamation costs C. Capitalized expenditures D. Salvage value of any sold or disposed assets

Last Answer : D. Salvage value of any sold or disposed assets

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

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

Capital budgeting decisions are based on: A. Incremental profit B. Incremental cash flows C. Incremental assets D. Incremental capital

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

Which of the following is not a relevant cost in capital budgeting? A. Sunk Cost B. Opportunity cost C. Allocated overheads D. Both (a) and (c) above

Description : Which of the following is not a relevant cost in capital budgeting? A. Sunk Cost B. Opportunity cost C. Allocated overheads D. Both (a) and (c) above

Last Answer : D. Both (a) and (c) above

A sound capital budgeting technique is based on: A. Cash Flows B. Accounting Profit C. Interest rate on borrowings D. Last dividend paid

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

Which of the following is not incorporated in capital budgeting? A. Tax effect B. Time Value of Money C. Required rate of return D. Rate of cashdiscount

Description : Which of the following is not incorporated in capital budgeting? A. Tax effect B. Time Value of Money C. Required rate of return D. Rate of cashdiscount

Last Answer : D. Rate of cashdiscount

Capital budgeting decisions are: A. Reversible B. Irreversible C. Unimportant D. All of the above

Description : Capital budgeting decisions are: A. Reversible B. Irreversible C. Unimportant D. All of the above

Last Answer : B. Irreversible

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

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

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 opportunity costs, but ignore sunk costs C. ignore both opportunity costs and sunk costs D. include both opportunity and sunk costs

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

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

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

In proper capital budgeting analysis we evaluate incremental cash flows. A. accounting B. operating C. before-tax D. financing

Description : In proper capital budgeting analysis we evaluate incremental cash flows. A. accounting B. operating C. before-tax D. financing

Last Answer : B. operating

The justification for the investment to be made in a project is documented in the: a. Cost Breakdown Structure. b. procurement strategy. c. business case. d. Project Management Plan.

Description : The justification for the investment to be made in a project is documented in the: a. Cost Breakdown Structure. b. procurement strategy. c. business case. d. Project Management Plan.

Last Answer : c. business case.

The justification for the investment to be made in a project is documented in the: a. Cost Breakdown Structure. b. procurement strategy. c. business case. d. Project Management Plan

Description : The justification for the investment to be made in a project is documented in the:  a. Cost Breakdown Structure.  b. procurement strategy.  c. business case.  d. Project Management Plan

Last Answer : c. business case.

Identify the incorrect statement in connection with working capital management. A. Long-term funds are more expensive than short-term funds but also riskier B. The objectives of working capital management are profitability and liquidity C. Permanent current assets should be financed from long-term sources if a moderate or matching policy is adopted D. Conservative financing policies use short-term funds to finance only part of fluctuating current assets E. Aggressive financing policies increase profitability at the cost of higher risk

Description : Identify the incorrect statement in connection with working capital management. A. Long-term funds are more expensive than short-term funds but also riskier B. The objectives of ... fluctuating current assets E. Aggressive financing policies increase profitability at the cost of higher risk

Last Answer : A. Long-term funds are more expensive than short-term funds but also riskier

Which of the following types of company will have the lowest level of investment in working capital to finance? A. Water suppliers B. Supermarkets C. Chemical manufacturers D. Ship builders E. Car

Description : Which of the following types of company will have the lowest level of investment in  working capital to finance? A. Water suppliers B. Supermarkets C. Chemical manufacturers D. Ship builders E. Car

Last Answer : B. Supermarkets

Identify which technique will not help a company to optimise its working capital cycle. A. Offering discounts for early payment by debtors B. Using cash management models to optimise the level of cash held C. Taking full advantage of credit offered by trade suppliers D. Applying the economic order quantity model to stock management E. Adopting the use of just-in-time stock management

Description : Identify which technique will not help a company to optimise its working capital cycle. A. Offering discounts for early payment by debtors B. Using cash management models to optimise the level of ... order quantity model to stock management E. Adopting the use of just-in-time stock management

Last Answer : B. Using cash management models to optimise the level of cash held

Which of the following will improve a company's working capital management position? A. An increased level of bad debts B. An increase in the credit period allowed by suppliers C. An increased debtor collection period D. An increase in the stock turnover period E. An increase in the length of the production

Description : Which of the following will improve a company's working capital management position? A. An increased level of bad debts B. An increase in the credit period allowed by suppliers C. An increased debtor ... D. An increase in the stock turnover period E. An increase in the length of the production

Last Answer : B. An increase in the credit period allowed by suppliers

Which of the following is a basic principle of finance as it relates to the management of working capital? A. Profitability varies inversely with risk. B. Liquidity moves together with risk. C. Profitability moves together with risk. D. Profitability moves together with liquidity.

Description : Which of the following is a basic principle of finance as it relates to the management of  working capital? A. Profitability varies inversely with risk. B. Liquidity moves together with risk. C. Profitability moves together with risk. D. Profitability moves together with liquidity.

Last Answer : C. Profitability moves together with risk.

Following is(are) the responsibility(ies) of the project manager. (A) Budgeting and cost control (B) Allocating resources (C) Tracking project expenditure

Description : Following is(are) the responsibility(ies) of the project manager. (A) Budgeting and cost control (B) Allocating resources (C) Tracking project expenditure

Last Answer : (C) Tracking project expenditure

Following is(are) the responsibility(ies) of the project manager. (A)Budgeting and cost control (B)Allocating resources (C)Tracking project expenditure (D)All of the above

Description : Following is(are) the responsibility(ies) of the project manager. (A)Budgeting and cost control (B)Allocating resources (C)Tracking project expenditure (D)All of the above

Last Answer : (D)All of the above

Interest payments, principal payments, and cash dividends are the typical budgeting cash-flow analysis because they are A. included in; financing B. excluded from; financing C. included in; operating D. excluded from; operating

Description : Interest payments, principal payments, and cash dividends are the typical budgeting cash-flow analysis because they are A. included in; financing B. excluded from; financing C. included in; operating D. excluded from; operating

Last Answer : C. included in; operating

A time-phased budget that project managers use to measure and monitor cost performance. A. Cost Baseline B. Cost Budgeting C. Cost Estimating D. Cost Variance

Description :  A time-phased budget that project managers use to measure and monitor cost performance. A. Cost Baseline B. Cost Budgeting C. Cost Estimating D. Cost Variance

Last Answer : A. Cost Baseline

Risk in capital budgeting implies that the decision maker knows _ of the cash flows. A. Variability B. Certainty C. Probability D. None of these

Description : Risk in capital budgeting implies that the decision maker knows _ of the cash flows. A. Variability B. Certainty C. Probability D. None of these

Last Answer : C. Probability

The return available by investing the capital elsewhere is known as (A) profit rate (B) discount rate (C) opportunity cost (D) return on investment

Description : The return available by investing the capital elsewhere is known as (A) profit rate (B) discount rate (C) opportunity cost (D) return on investment

Last Answer : (C) opportunity cost

MM Model of Dividend irrelevance uses arbitrage between : A. Dividend and Bonus B. Dividend and Capital Issue C. Profit and Investment D. None of the

Description : MM Model of Dividend irrelevance uses arbitrage between : A. Dividend and Bonus B. Dividend and Capital Issue C. Profit and Investment D. None of the

Last Answer : B. Dividend and Capital Issue

The decision to request an increase the resources for a project is the responsibility of the: 1. Functional manager 2. Project manager 3. Director of project management 4. Customer

Description : The decision to request an increase the resources for a project is the responsibility of the: 1. Functional manager  2. Project manager  3. Director of project management  4. Customer

Last Answer : 2. Project manager

Several upgradation tasks done in the same area by the same company might best be managed as part of a/an (A) portfolio (B) program (C) investment (D) collaboration

Description : Several upgradation tasks done in the same area by the same company might best be managed as  part of a/an (A) portfolio (B) program (C) investment (D) collaboration

Last Answer : (B) program

Following are the phases of Project Management Life Cycle. Arrange them in correct order 1. Design, 2. Marketing, 3. Analysis and evaluation, 4. Inspection, testing and delivery (A) 3-2-1-4 (B) 1-2-3-4 (C) 2-3-1-4 (D) 4-3-2-1

Description : Following are the phases of Project Management Life Cycle. Arrange them in correct order 1. Design, 2. Marketing, 3. Analysis and evaluation, 4. Inspection, testing and delivery (A) 3-2-1-4 (B) 1-2-3-4 (C) 2-3-1-4 (D) 4-3-2-1

Last Answer : (A) 3-2-1-4

Following are the phases of Project Management Life Cycle. Arrange (B) 1-2-3-4 (C) 2-3-1-4 (D) 4-3-2-1them in correct order 1. Design, 2. Marketing, 3. Analysis and evaluation, 4. Inspection, testing and delivery (A) 3-2-1-4

Description : Following are the phases of Project Management Life Cycle.  Arrange them in correct order 1. Design, 2. Marketing, 3. Analysis and evaluation, 4. Inspection, testing and delivery  (A) 3-2-1-4 (B) 1-2-3-4 (C) 2-3-1-4 (D) 4-3-2-1

Last Answer : (D) 4-3-2-1

Andrew has joined as the Project Manager of a project. One of the project documents available to Andrew lists down all the risks in a hierarchical fashion. What is this document called? a. Risk Management Plan. b. List of risks. c. Monte Carlo diagram. d. Risk Breakdown Structure.

Description : Andrew has joined as the Project Manager of a project. One of the project documents available to Andrew lists down all the risks in a hierarchical fashion. What is this document called? a. Risk Management Plan. b. List of risks. c. Monte Carlo diagram. d. Risk Breakdown Structure.

Last Answer : d. Risk Breakdown Structure.

Which of the following items should not be includedb) Detailed schedules, budgets and resource allocations c) The life cycle model to be used d) The organisational structure of the development organisation, project responsibilities, managerial objectives and priorities e) None of the above. in the project management plan? a) The techniques and case tools to be used

Description : Which of the following items should not be included in the  project management plan? a) The techniques and case tools to be used b) Detailed schedules, budgets and resource ... development  organisation, project responsibilities, managerial  objectives and priorities e) None of the above.

Last Answer : c) The life cycle model to be used

Andrew has joined as the Project Manager of a project. One of the project documents available to Andrew lists down all the risks in a hierarchical fashion. What is this document called? a. Risk Management Plan. b. List of risks. c. Monte Carlo diagram. d. Risk Breakdown Structure.

Description : Andrew has joined as the Project Manager of a project. One of the project documents  available to Andrew lists down all the risks in a hierarchical fashion. What is this document  called? a. Risk Management Plan. b. List of risks. c. Monte Carlo diagram. d. Risk Breakdown Structure.

Last Answer : d. Risk Breakdown Structure.

The Scope Management Plan is included in which of the following documents. 1. Project Plan 2. The Work Breakdown Structure 3. The Scope Statement 4. Project Specifications

Description : The Scope Management Plan is included in which of the following documents. 1. Project Plan  2. The Work Breakdown Structure  3. The Scope Statement  4. Project Specifications

Last Answer : 3. The Scope Statement

) One of the initial project documents, issued by senior management, which outlines the authority of the project manager, is called Project charter. As a seller, what other document can be used in this place: 1. Work breakdown structure 2. Project scope 3. Contract 4. Internal memo

Description : ) One of the initial project documents, issued by senior management, which outlines the  authority of the project manager, is called Project charter. As a seller, what other document can  be used in this place: 1. Work breakdown structure  2. Project scope  3. Contract  4. Internal memo

Last Answer : 3. Contract

Net working capital refers to A. total assets minus fixed assets B. current assets minus current liabilities C. current assets minus inventories D. current

Description : Net working capital refers to A. total assets minus fixed assets B. current assets minus current liabilities C. current assets minus inventories D. current

Last Answer : B. current assets minus current liabilities

Which of the following statements relating to working capital financing is not correct? A. An aggressive policy uses long-term debt to finance fluctuating current assetsB. Long-term debt is less risky that short-term debt C. A conservative policy uses long-term debt to finance fixed assets D. Short-term debt is cheaper than long-term debt E. The matching principle indicates that fluctuating current assets should be financed by short-term debt

Description : Which of the following statements relating to working capital financing is not correct? A. An aggressive policy uses long-term debt to finance fluctuating current assets B. Long-term debt ... . The matching principle indicates that fluctuating current assets should be  financed by short-term debt

Last Answer : A. An aggressive policy uses long-term debt to finance fluctuating current assets

Which of the following factors does not need to be considered when formulating policies on the level and financing of working capital? A. The attitude to risk of a company’s managers B. The relative cost of short-term and long-term finance C. The availability of revenue reserves and capital reserves D. Terms of trade offered by competitors

Description : Which of the following factors does not need to be considered when formulating  policies on the level and financing of working capital? A. The attitude to risk of a company's managers B. ... C. The availability of revenue reserves and capital reserves D. Terms of trade offered by competitors

Last Answer : C. The availability of revenue reserves and capital reserves

If a company moves from a "conservative" working capital policy to an "aggress ive" policy, it should expect . A. liquidity to decrease, whereas expected profitability would increase B. expected profitability to increase, whereas risk would decrease C. liquidity would increase, whereas risk would also increase D. risk and profitability to

Description : If a company moves from a "conservative" working capital policy to an "aggress ive"  policy, it should expect . A. liquidity to decrease, whereas expected profitability would increase B. ... decrease C. liquidity would increase, whereas risk would also increase D. risk and profitability to

Last Answer : A. liquidity to decrease, whereas expected profitability would increase

Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to . A. meet its cash obligations as they occur and take advantage of prompt payment B. discounts C. support the proper level of sales and take prompt payment discounts D. maintain current and acid-test ratios at or above industry norms E. meet its cash obligations as they occur and support the proper level of

Description : Risk, as it relates to working capital, means that there is jeopardy to the firm for not  maintaining sufficient current assets to . A. meet its cash obligations as they occur and take advantage ... above industry norms E. meet its cash obligations as they occur and support the proper level of

Last Answer : D. maintain current and acid-test ratios at or above industry norms

Having defined working capital as current assets, it can be further classified according to . A. financing method and time B. rate of return and financing method C. time and rate of return D. components & time

Description : Having defined working capital as current assets, it can be further classified according to  . A. financing method and time B. rate of return and financing method C. time and rate of return D. components & time

Last Answer : D. components & time

The amount of current assets that varies with seasonal requirements is referred to as working capital. A. permanent B. net C. temporary D. gross

Description : The amount of current assets that varies with seasonal requirements is referred to as  working capital. A. permanent B. net C. temporary D. gross

Last Answer : C. temporary

The amount of current assets required to meet a firm's long-term minimum needs is referred to as working capital. A. permanent B. temporary C. net D. gross

Description : The amount of current assets required to meet a firm's long-term minimum needs is  referred to as working capital. A. permanent B. temporary C. net D. gross

Last Answer : A. permanent

Which of the following would be consistent with a hedging (maturity matching) approach to financing working capital? A. Financing short-term needs with short-term funds B. Financing short-term needs with long-term debt. C. Financing seasonal needs with long-term funds. D. Financing some long-term needs with short-term funds.

Description : Which of the following would be consistent with a hedging (maturity matching) approach  to financing working capital? A. Financing short-term needs with short-term funds B. Financing short-term needs ... needs with long-term funds. D. Financing some long-term needs with short-term funds.

Last Answer : A. Financing short-term needs with short-term funds

Which of the following would be consistent with a conservative approach to financ ing working capital? A. Financing short-term needs with short-term funds. B. Financing short-term needs with long-term debt. C. Financing seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds.

Description : Which of the following would be consistent with a conservative approach to financ ing  working capital? A. Financing short-term needs with short-term funds. B. Financing short-term needs with long- ... seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds.

Last Answer : B. Financing short-term needs with long-term debt.

Which of the following would be consistent with an aggressive approach to financ ing working capital? A. Financing short-term needs with short-term funds. B. Financing permanent inventory buildup with long-term debt. C. Financing seasonal needs with short-term funds. D. Financing some long-term needs with short-term funds

Description : Which of the following would be consistent with an aggressive approach to financ ing  working capital? A. Financing short-term needs with short-term funds. B. Financing permanent inventory buildup with ... needs with short-term funds. D. Financing some long-term needs with short-term  funds

Last Answer : D. Financing some long-term needs with short-term  funds.