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FMSM - 7 INVESTMENT DECISIONS

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Marks: 12

Q.   1

 A capital budgeting technique which does not require the computation of cost of capital for decision making purposes is:

Q.   2

If two alternative proposals are such that the acceptance of one shall exclude the possibility of the acceptance of another then such decision making will lead to:

Q.   3

 In case a company considers a discounting factor higher than the cost of capital for arriving at present values, the present values of cash inflows will be:

Q.   4

 If the cut off rate of a project is greater than IRR, we may:

Q.   5

 While evaluating capital investment proposals, time value of money is used in which of the following techniques:

Q.   6

 IRR would favor project proposals which have:

Q.   7

Depreciation is included as a cost in which of the following techniques:

 

 

 

 

Q.   8

Management is considering a ₹ 1,00,000 investment in a project with a 5 year life and no residual value. If the total income from the project is expected to be ₹ 60,000 and recognition is given to the effect of straight line depreciation on the investment, the average rate of return is:

Q.   9

 Assume cash outflow equals ₹ 1,20,000 followed by cash inflows of ₹ 25,000 per year for 8 years and a cost of capital of 11%. What is the Net present value?

Q.   10

 While evaluating investments, the release of working capital at the end of the project's life should be considered as:

 

 

Q.   11

 Capital rationing refers to a situation where:

 

 

Q.   12

 Capital budgeting is done for:

 

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