_____________ may be defined as the excess of present value of project cash inflows over that of out flows. A. Net present value technique. B. Average rate of return. C. Benefit-Cost ratio. D. Internal rate of return

_____________ may be defined as the excess of present value of project cash inflows over
that of out flows.
A. Net present value technique.
B. Average rate of return.
C. Benefit-Cost ratio.
D. Internal rate of return
by

1 Answer

Answer :

A. Net present value technique.
by

Related questions

A project has the following cash inflows Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 1 through 4, respectively. The initial cash outflow is Rs.104,000. Which of the following four statements is correct concerning the project internal rate of return (IRR)? A. The IRR is less than 10%. B. The IRR is greater than or equal to 10%, but less than 14%. C. The IRR is greater than or equal to 14%, but less than 18%. D. The IRR is greater than or equal to 18%.

Description : A project has the following cash inflows Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 1 through 4, respectively. The initial cash outflow is Rs.104,000. Which of the following four statements ... than or equal to 14%, but less than 18%. D. The IRR is greater than or equal to 18%.

Last Answer : C. The IRR is greater than or equal to 14%, but less than 18%.

Net Present Value of a machine is A. PV of cash inflows less cost of investment B. PV of cash inflows ÷ cost of investment C. PV of net profit after tax less cost of investment D.PV of cash inflows less average cost of investment

Description : Net Present Value of a machine is  A. PV of cash inflows less cost of investment  B. PV of cash inflows ÷ cost of investment  C. PV of net profit after tax less cost of investment  D.PV of cash inflows less average cost of investment

Last Answer : A. PV of cash inflows less cost of investment

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

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

Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated

Description : Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with ... of return is rarely used by firms today because of the ease at which net present value is calculated

Last Answer : D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

Description : Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with ... of return is rarely used by firms today because of the ease at which net present value is calculated.

Last Answer : D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sigD. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculatedn changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money.

Description : Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return B. As long as you are not dealing with ... of return is rarely used by firms today because of the ease at which net present value is calculated

Last Answer : D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

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 assume that the appropriate cost of capital is 10% and the appropriate risk-free rate is 6%. A. Rs.15,115 B. Rs.26,798 C. Rs.33,346 D. Rs.48,121

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

_____________ can be defined as a specifically evolved work plan densed to achieve a specific objective within a specific period of time A. Idea generation. B. Opportunity Scanning. C. Project. D. Strategy.

Description : _____________ can be defined as a specifically evolved work plan densed to achieve a specific objective within a specific period of time A. Idea generation. B. Opportunity Scanning. C. Project. D. Strategy.

Last Answer : C. Project.

What is a cash flow table in project management? A. A table portraying inflow of cash in a project B. A table portraying outgoing expenses of a project C. It is the tool that is used to study such cash flows by breaking inflows and outflows down, usually on a monthly basis D. A table portraying debts taken for a project

Description : What is a cash flow table in project management?  A. A table portraying inflow of cash in a project  B. A table portraying outgoing expenses of a project  C. It is the tool that is used ... inflows and  outflows down, usually on a monthly basis  D. A table portraying debts taken for a project

Last Answer : C. It is the tool that is used to study such cash flows by breaking inflows and  outflows down, usually on a monthly basis

_________ method for profitability evaluation of a project does not account for investment cost due to land. (A) Net present worth (B) Pay out period (C) Discounted cash flow (D) Rate of return on investment

Description : _________ method for profitability evaluation of a project does not account for investment cost due to land. (A) Net present worth (B) Pay out period (C) Discounted cash flow (D) Rate of return on investment

Last Answer : (B) Pay out period

The payback method for the measurement of return on investment (A) Gives a correct picture of profitability (B) Underemphasises liquidity (C) Does not measure the discounted rate of return (D) Takes into account the cash inflows after the recovery of investments

Description : The payback method for the measurement of return on investment (A) Gives a correct picture of profitability (B) Underemphasises liquidity (C) Does not measure the discounted rate of return (D) Takes into account the cash inflows after the recovery of investments

Last Answer : (C) Does not measure the discounted rate of return

____________ is a graphical representation of the various activity and event relating to a project. A. Network analysis. B. Scheduling technique. C. Logical Model. D. Network Diagram

Description : ____________ is a graphical representation of the various activity and event relating to a project. A. Network analysis. B. Scheduling technique. C. Logical Model. D. Network Diagram

Last Answer : D. Network Diagram

Which method does not consider the time value of money A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability Index

Description : Which method does not consider the time value of money A. Net present value B. Internal Rate of Return C. Average rate of return D. Profitability Index

Last Answer : C. Average rate of return

_____________ is primarily concerned with the identification, qualification and evaluation of the project resources. A. Techno-economic analysis. B. Feasibility analysis. C. Input analysis. D. Financial analysis.

Description : _____________ is primarily concerned with the identification, qualification and evaluation of the project resources. A. Techno-economic analysis. B. Feasibility analysis. C. Input analysis. D. Financial analysis.

Last Answer : B.Feasibility analysis.

Additional time which a non-critical activity can consume without increasing the project duration is called _____________. A. Total Float. B. Free Float C. Independent Float. D. Dependant Float

Description : Additional time which a non-critical activity can consume without increasing the project duration is called _____________. A. Total Float. B. Free Float C. Independent Float. D. Dependant Float

Last Answer : A. Total Float.

_____________ is used to accomplish the project economically in the minimum available time with limited resources A. Project Scheduling. B. Network Analysis. C. Budget Analysis. D. Critical Planning.

Description : _____________ is used to accomplish the project economically in the minimum available time with limited resources A. Project Scheduling. B. Network Analysis. C. Budget Analysis. D. Critical Planning.

Last Answer : A. Project Scheduling.

With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project (A) Decreases (B) Increases (C) Increases linearly (D) Remain constant

Description : With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project (A) Decreases (B) Increases (C) Increases linearly (D) Remain constant

Last Answer : (A) Decreases

When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

Description : When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of ... net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

Last Answer : B. net present value (NPV)

When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

Description : When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of ... net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

Last Answer : B. net present value (NPV)

The cash inflows and (outflows) associated with a project are as follows: At start (120000) , Year1-40000, Year2-50000, Year3-60000, Residual Value(at the end of 3rd year)-20000. The payback period for this project would be: A 2 years and 3 months. B 2 years and 6 months. C 3 years. D 2 years.

Description : The cash inflows and (outflows) associated with a project are as follows: At start  (120000) , Year1-40000, Year2-50000, Year3-60000, Residual Value(at the end of 3rd  year)-20000. The payback period for this project ... 2 years and 3 months.  B 2 years and 6 months.  C 3 years.  D 2 years.

Last Answer : B 2 years and 6 months.

When a firm enters into some business which is related with its present business in terms of technology, marketing or both it is called as _____________. A. conglomerate diversification. B. horizontal integration. C. vertical integration. D. concentric integration.

Description : When a firm enters into some business which is related with its present business in terms of technology, marketing or both it is called as _____________. A. conglomerate diversification. B. horizontal integration. C. vertical integration. D. concentric integration.

Last Answer : D. concentric integration.

Which of the following is not considered to be a characteristic of a project? A. An established objective B. Complex tasks C. A clear beginning and end D. Only for internal use

Description : Which of the following is not considered to be a characteristic of a project? A. An established objective B. Complex tasks C. A clear beginning and end D. Only for internal use

Last Answer : D. Only for internal use

The payback period is the period A. a project takes to pay back the loan taken to purchase the capital assets B. equal to the useful life of the machines C. a project takes to recover its initial cash outflow D. over which the project will be getting operating cash inflows

Description : The payback period is the period  A. a project takes to pay back the loan taken to purchase the capital assets  B. equal to the useful life of the machines  C. a project takes to recover its initial cash outflow  D. over which the project will be getting operating cash inflows

Last Answer : C. a project takes to recover its initial cash outflow

Which of the following statements is false? A. Market segmentation is a useful process for small businesses to undertake. B. Selling is essentially a matching process. C. A benefit is the value of a product feature to a customer. D. It is a good idea for small businesses to compete solely on price.

Description : Which of the following statements is false? A. Market segmentation is a useful process for small businesses to undertake. B. Selling is essentially a matching process. C. A benefit is the value of a product feature to a customer. D. It is a good idea for small businesses to compete solely on price.

Last Answer : D. It is a good idea for small businesses to compete solely on price.

Under-capitalization arises due to __________. A. excess of assets over the liabilities. B. excess of liabilities over the assets. C. actual capitalization is higher than the proper capitalization. D. actual capitalization is lower than the proper capitalization.

Description : Under-capitalization arises due to __________. A. excess of assets over the liabilities. B. excess of liabilities over the assets. C. actual capitalization is higher than the proper capitalization. D. actual capitalization is lower than the proper capitalization.

Last Answer : D. actual capitalization is lower than the proper capitalization.

Over - capitalization arises due to___________. A. excess of assets over the liabilities. B. excess of liabilities over the assets. C. actual earnings are lower than the expected earnings. D. actual earnings are higher than the expected earnings.

Description : Over - capitalization arises due to___________. A. excess of assets over the liabilities. B. excess of liabilities over the assets. C. actual earnings are lower than the expected earnings. D. actual earnings are higher than the expected earnings.

Last Answer : C. actual earnings are lower than the expected earnings.

Underestimation of project cost leads to ___________. A. Time under run. B. Cost under run C. Time over run. D. Cost over run

Description : Underestimation of project cost leads to ___________. A. Time under run. B. Cost under run C. Time over run. D. Cost over run

Last Answer : D. Cost over run

We need to update the business plan becausea) Environmental factors and internal factors can change the direction of the plan b) Goals set by the entrepreneurs may be unreasonable c) Goals may not be measurable d) Goals may not be specific

Description : We need to update the business plan becausea) Environmental factors and internal factors can change the direction of the plan b) Goals set by the entrepreneurs may be unreasonable c) Goals may not be measurable d) Goals may not be specific

Last Answer : a) Environmental factors and internal factors can change the direction of the plan

A company has to choose between two projects whose cash flows are as indicated below; Project 1: i. Investment – Rs. 15 Lakhs ii. Annual cost savings – Rs. 4 lakhs. iii. Bi-annual maintenance cost – Rs. 50,000/- iv. Reconditioning and overhaul during 5th year: 6 lakhs v. Life of the project – 8 years vi. Salvage value – Rs. 5 lakhs Project 2: vii. Investment – Rs. 14 Lakhs viii. Annual cost savings – Rs. 3.5 lakhs. ix. Annual Maintenance cost – Rs. 20,000/- x. Reconditioning and overhaul during 4th year: 5 lakhs xi. Life of the project – 8 years xii. Salvage Value- 2 lakhs Which project should the company choose? The annual discount rate is 12

Description :  A company has to choose between two projects whose cash flows are as indicated  below; Project 1:  i. Investment - Rs. 15 Lakhs ii. Annual cost savings - Rs. 4 lakhs. iii. Bi-annual ... years xii. Salvage Value- 2 lakhs Which project should the company choose? The annual discount rate is 12

Last Answer : Year Project 1 Project 2 Outgo Saving NPV Outgo Saving NPV 0 15.0 0 =-15.0 14.0 0 = -14 1 0 4.0 = (4 / (1+.12)1 = 3.571 0.2 3.5 = (3.3 / (1+.12)1 = 2.95 2 0.5 4.0 = (3.5 / (1+.12)2 = 2.79 0.2 3.5 ... (1+.12)8 = 3.43 0.2 5.5  (3.5+2) = (5.3 / (1+.12)8 = 2.14 NPV = + 2.301 @12% = + 0.15

Cash inflows from a project include: A. tax shield of depreciation B. after tax operating profits C. raising of funds D. Both (a) and (b)

Description : Cash inflows from a project include: A. tax shield of depreciation B. after tax operating profits C. raising of funds D. Both (a) and (b)

Last Answer : D. Both (a) and (b)

A project, which may not add to the existing profits, should be financed by _________ A. debentures. B. preference share capital. C. equity capital. D. public deposits.

Description : A project, which may not add to the existing profits, should be financed by _________ A. debentures. B. preference share capital. C. equity capital. D. public deposits.

Last Answer : A. debentures.

Every entrepreneur should draw an _______ for his project to ensure the timely completion of all activities involved in setting up an enterprise. A. cost structure B. implementation plan C. market structure D. production structure

Description : Every entrepreneur should draw an _______ for his project to ensure the timely completion of all activities involved in setting up an enterprise. A. cost structure B. implementation plan C. market structure D. production structure

Last Answer : B. implementation plan

____________, which is included in the project cost, is estimated on the basis of the year when the enterprise breaks even. A. working capital B. cost of capital C. cost of production D. cost of equity

Description : ____________, which is included in the project cost, is estimated on the basis of the year when the enterprise breaks even. A. working capital B. cost of capital C. cost of production D. cost of equity

Last Answer : A. working capital

__________________ is a problem -solving technique designed to produce numerous ideas in a short period A. Synectics. B. Delphi technique. C. Brain storming. D. Nominal group technique.

Description : __________________ is a problem -solving technique designed to produce numerous ideas in a short period A. Synectics. B. Delphi technique. C. Brain storming. D. Nominal group technique.

Last Answer : C. Brain storming.

NABARD is a Bank for _____________ development A. Urban B. Agricultural and Rural C. Scientific D. Agriculture and research

Description : NABARD is a Bank for _____________ development A. Urban B. Agricultural and Rural C. Scientific D. Agriculture and research

Last Answer : B. Agricultural and Rural

Swot Analysis is a _____________ tool A. Conceptual B. Modern C. Scientific D. Traditional

Description : Swot Analysis is a _____________ tool A. Conceptual B. Modern C. Scientific D. Traditional

Last Answer : A. Conceptual

_____________ is an event-oriented approach . A. CPM. B. GERT. C. PERT. D. WASP.

Description : _____________ is an event-oriented approach . A. CPM. B. GERT. C. PERT. D. WASP.

Last Answer : 1

_____________ refers to some action which is a time consuming effort necessary to complete a specific event. A. A Network. B. An Activity. C. An Event. D. A Node.

Description : _____________ refers to some action which is a time consuming effort necessary to complete a specific event. A. A Network. B. An Activity. C. An Event. D. A Node.

Last Answer : B. An Activity.

An individual who starts, creates and manages a new business can be called _____________. A. A leader B. A manager C. A professional D. An entrepreneur

Description : An individual who starts, creates and manages a new business can be called _____________. A. A leader B. A manager C. A professional D. An entrepreneur

Last Answer : D. An entrepreneur

Innovation can best be defined as_______. A. the generation of new ideas. B. the evolution of new ideas. C. the opposite of creativity. D. the successful exploitation of new ideas.

Description : Innovation can best be defined as_______. A. the generation of new ideas. B. the evolution of new ideas. C. the opposite of creativity. D. the successful exploitation of new ideas.

Last Answer : D. the successful exploitation of new ideas.

he granting of cash subsidy on the capital investment is called __________. A. Concessional finance. B. Quantum of Subsidy. C. Interest Subsidy. D. Central Investment Subsidy.

Description : he granting of cash subsidy on the capital investment is called __________. A. Concessional finance. B. Quantum of Subsidy. C. Interest Subsidy. D. Central Investment Subsidy.

Last Answer : D. Central Investment Subsidy.

Which of the following does not affect cash flows from a proposal: A. Salvage value B. Depreciation amount C. Tax rate change D. Method of project financing

Description : Which of the following does not affect cash flows from a proposal: A. Salvage value B. Depreciation amount C. Tax rate change D. Method of project financing

Last Answer : D. Method of project financing

A commercial banker would prefer a ____________ debt-equity ratio over the years as it indicates financial strength of a unit. A. Declining. B. Increasing. C. Stable. D. Fluctuating.

Description : A commercial banker would prefer a ____________ debt-equity ratio over the years as it indicates financial strength of a unit. A. Declining. B. Increasing. C. Stable. D. Fluctuating.

Last Answer : A. Declining A commercial banker would prefer a declining debt-equity ratio over the years as it indicates the financial strength of a unit. A declining debt-equity ratio means that the company ... fluctuating ratio might indicate that the company is not able to manage its debt and equity properly.

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

Memorandum of association of a firm contains _______. A. rules regarding the internal management of the company. B. rules regarding the constitution and activities of the company. C. rules regarding the external management. D. rules regarding the constitution.

Description : Memorandum of association of a firm contains _______. A. rules regarding the internal management of the company. B. rules regarding the constitution and activities of the company. C. rules regarding the external management. D. rules regarding the constitution.

Last Answer : B. rules regarding the constitution and activities of the company.

Which of the following leads to under-capitalization? A. raising of more money by issue of shares. B. acquiring fixed assets on excessive amounts. C. over-estimation of earnings for enterprise. D. under-estimation of initial rate of earnings.

Description : Which of the following leads to under-capitalization? A. raising of more money by issue of shares. B. acquiring fixed assets on excessive amounts. C. over-estimation of earnings for enterprise. D. under-estimation of initial rate of earnings.

Last Answer : D. under-estimation of initial rate of earnings.

Which of the following leads to over-capitalization? A. acquiring fixed assets on excessive amounts. B. under-estimation of initial rate of earnings. C. using lower-rate of capitalization. D. under estimation of required funds.

Description : Which of the following leads to over-capitalization? A. acquiring fixed assets on excessive amounts. B. under-estimation of initial rate of earnings. C. using lower-rate of capitalization. D. under estimation of required funds.

Last Answer : A. acquiring fixed assets on excessive amounts.

______________ describes the direction, the enterprise is going in, what its goals are, where it wants to be,and how it is going to get there. A. project report B. technical anlaysis C. market analysis D. financial analysis

Description : ______________ describes the direction, the enterprise is going in, what its goals are, where it wants to be,and how it is going to get there. A. project report B. technical anlaysis C. market analysis D. financial analysis

Last Answer : A. project report

market potential of the project report includes ________. A. demand and supply conditions B. market strategy C. after sales service D. all the above

Description : market potential of the project report includes ________. A. demand and supply conditions B. market strategy C. after sales service D. all the above

Last Answer : D. all the above