**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?

Correct! Wrong!

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

Correct! Wrong!

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

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

Correct! Wrong!

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

Correct! Wrong!

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

Correct! Wrong!

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

Correct! Wrong!

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

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

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

Correct! Wrong!

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