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 : Internal costs include a) Developers salaries b) Managers and support personnel salaries c) The cost of overheads such as utilities, rent and senior managers d) Materials (such as manuals) and services such as travel e) All of the above.
Last Answer : a) Developers salaries
Description : In Project crashing, rent and overheads are treated as A.Significant Cost B.Insignificant costs C.Direct Costs D.Indirect Costs
Last Answer : D.Indirect Costs
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 a capital budgeting decision? A. Expansion programme B. Merger C. Replacement of an Asset D. Inventory Level
Last Answer : D. Inventory Level
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
Description : Capital budgeting decisions are: A. Reversible B. Irreversible C. Unimportant D. All of the above
Last Answer : B. Irreversible
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 : 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 : 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 : In proper capital budgeting analysis we evaluate incremental cash flows. A. accounting B. operating C. before-tax D. financing
Last Answer : B. operating
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 : 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
Description : Costs that are not directly related to the products or services of the project, but are indirectly related to performing the project. A. Intangible Costs B. Sunk Cost C. Tangible Costs D. Indirect Costs
Last Answer : D. Indirect Costs
Description : In resource allocation, the resources are allocated to a project in order that the…...............are attained a. Goals b. Objectives c. Both a, b d. None of the above
Last Answer : c. Both a, b
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
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
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
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
Description : Sunk costs are: (a) relevant for decision making (b) Not relevant for decision making (c) cost to be incurred in future (d) future costs
Last Answer : (b) Not relevant for decision making
Description : In project scheduling, resources are allocated so that project objectives are attained within a ……… a. sensible time span b. lavish time c. excessive d. undue
Last Answer : a. sensible time span
Description : An expenditure that has been made and cannot be recovered is called - (1) Variable cost (2) Opportunity cost (3) Sunk cost (4) Operational cost
Last Answer : (3) Sunk cost Explanation: In economics and business decision-making, sunk costs are retrospective (past) costs that have already been incurred and cannot be recovered. Sunk costs are sometimes contrasted ... is taken. The sunk cost is distinct from economic loss. Sunk costs may cause cost overrun.
Description : An expenditure that has been made and cannot be recovered is called (1) Variable cost (2) Opportunity cost (3) Sunk cost (4) Operational cost
Last Answer : Sunk cost
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
Description : ___ should be made of all cost factors so as to reflect on all relevant investment and operational costs of the project including contingencies.
Last Answer : Ans. Realistic estimates
Description : The Three attributes of project risk are _________, ___________ and ___________. 1. What might happen, who it happens to, and how much will it cost 2. Notification, frequency of relevant events, ... planning, total number of risk events 5. Risk event, probability occurrence, the amount at stake
Last Answer : 5. Risk event, probability occurrence, the amount at stake
Description : A communication management plan identifies the relevant information that should be communicated to: a. the project team. b. the project stakeholders. c. the project board. d. the project sponsor.
Last Answer : b. the project stakeholders.
Description : Ahmed is actively initiating a project, so he plans to invite all relevant internal and external stakeholders including sponsors, customers, project teams, etc. for a kick-off meeting. To ensure all ... b. Scope statement c. Project charter d. Work packages e. Project funding agents
Last Answer : c. Project charter
Description : Residuals theory argues that dividend is a : A. Relevant Decision B. Active Decision C. Passive Decision D. Irrelevant
Last Answer : C. Passive Decision
Description : Which one of the following best describes a project issue? a. A major problem that requires formal escalation. b. A problem that the project manager has to deal with on a day-to-day basis. c. An uncertain event that may or may not occur. d. An opportunity that occurs through change control.
Last Answer : a. A major problem that requires formal escalation.
Description : An Expected Monetary Value (EMV) of $100000 on a potential project event in the project means which of the following? Select one: a. A number that can be ignored b. An opportunity that ... Actual investment returns on the event e. A threat that must be considered to minimize the project risk
Last Answer : b. An opportunity that must be explored
Description : Basic infrastructure facilities in Economics are known as : (1) Human capital (2) Physical capital (3) Social overheads capital (4) Working capital
Last Answer : (3) Social overheads capital Explanation: Social overheads capital is the capital spent on social infrastructure, such as schools, universities, hospitals, libraries. They are capital goods of ... government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
Last Answer : Social overheads capital
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 : Epx = Percentage change in Qy / Percentage change in Px The above relationship is : A.Arc Cross Price Elasticity B.Cost Output C.Cost Profit D.Capital Budgeting
Last Answer : A.Arc Cross Price Elasticity
Description : The process of budgeting helps in the control of A. Cost of production B. Liquidity C. Capital Expenditure D. All of the above
Last Answer : D. All of the above
Description : Under section 7 the following are relevant- a) Occasion b) Cause & effect c) Opportunity & state of things d) All the above
Last Answer : d) All the above
Description : Under section 7 of Indian Evidence act- a) Identity is relevant b) Opportunity is relevant c) Introductory is relevant d) Conduct is relevant
Last Answer : b) Opportunity is relevant
Description : When there is a difference between all receipts and expenditure of the Government of India both capital and revenue it is called __________ A. Revenue Deficit B. Budgetary Deficit C. Zero Budgeting D. Trade Gap E. Balance of Payment Problem
Last Answer : B. Budgetary Deficit Explanation: Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government.If revenue expenses of the government ... leads to capital account deficit. Budgetary deficit is usually expressed as a percentage of GDP.
Description : Which of the following is true? A. Discounted cash flow analysis is the least precise of the cash flow techniques, because it does not consider the time value of money. B. NPV is ... least precise of the cash flow analysis techniques, because it assumes reinvestment at the cost of capital.
Last Answer : C. Payback period is the least precise of the cash flow analysis techniques, because it does not consider the time value of money.
Description : Which of the following is true regarding IRR? A. IRR assumes reinvestment at the cost of capital. B. IRR is the discount rate when NPV is greater than zero. C. IRR is a constrained optimization method. D. IRR is the discount rate when NPV is equal to zero.
Last Answer : D. IRR is the discount rate when NPV is equal to zero.
Description : Which of the following is true regarding NPV? A. NPV assumes reinvestment at the cost of capital. B. NPV decisions should be made based on the highest value for all the selections. C. NPV assumes reinvestment at the prevailing rate. D. NPV assumes reinvestment at the NPV rate.
Last Answer : A. NPV assumes reinvestment at the cost of capital.
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
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
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