A. negative index
B. exchange index
C. project index
D. profitability index
Finance Mcqs
A project which have one series of cash inflows and results in one or more cash outflows is classified as ……….
A. abnormal costs
B. normal cash flows
C. abnormal cash flow
D. normal costs
The initial cost is $5000 and the probability index is 3.2 then the present value of cash flows is ………?
A. 8200
B. 16000
C. 0.0064
D. 1562.5
The situation in which the firm limits the expenditures on capital is classified as ……….?
A. optimal rationing
B. capital rationing
C. marginal rationing
D. transaction rationing
An internal rate of return in capital budgeting can be modified to make it the representative of ……….?
A. relative outflow
B. relative inflow
C. relative cost
D. relative profitability
In capital budgeting, the number of non-normal cash flows having internal rate of returns are ………?
A. one
B. multiple
C. accepted
D. non-accepted
In calculation of internal rate of return, an assumption states that received cash flow from the project must ……….?
A. be reinvested
B. not be reinvested
C. be earned
D. not be earned
Other factors held constant, the greater project liquidity is because of ………..?
A. less project return
B. greater project return
C. shorter payback period
D. greater payback period
The profitability index in capital budgeting is used for ……….?
A. negative projects
B. relative projects
C. evaluate projects
D. earned projects
The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be ………..?
A. 0.55
B. 1.82
C. 0.55
D. 0.0182