Capital Budgeting MCQs


MCQs 1-10


1. A project costs $16,000.The estimated annual cash inflows during its 3 year life are $8,000, $7,000 and $6,000 respectively. What will be the pay-back period?

2. To estimate an unknown number that lies between two known numbers is knows as ___________?

3. Decision criterion with respect to profitability index to accept project if?

4. ____________ of a project is the sum of all present values of all cash inflows minus present value of outflows?

5. If you have to judge a project from its NPV, you will select the one with the______________?

6. Criteria that measures how quickly project will return its original investment is?

7. Capital budgeting is the process of identifying analyzing and selecting investments project whose returns are expected to extend beyond ____________________?

8. Indifference criteria when BCR (Benefit Cost Ratio)?

9. Criterion for IRR (Internal Rate of Return)?

10. Process that involves decision making with respect to investment in fixed asset?