Which of the followings is/are the example(s) of capital expenditures?

• A) All of the given options
• B) Purchase of new fixed asset
• C) Replacement of existing fixed asset
• D) Investment in alteration of fixed assets

All of the following are depreciation methods, Except:

• A) Declining Balance Method
• B) Specific Identification Method
• C) Straight Line Method
• D) Units of Output Method

Capital asset pricing model takes into account:

• A) Beta
• B) All of the given options
• C) Risk free rate of return
• D) Market return

Which of the followings is/are the type(s) of capital budgeting technique?

• A) Net Present Value
• B) Payback Period
• C) All of the given options
• D) Internal Rate of Return

Which of the following capital budgeting technique use “Interpolation method”?

• A) Profitability Index
• B) Profitability Index
• C) Payback period
• D) Internal Rate of return

Cost of capital includes:

• A) Cost of preferred shares
• B) All of the given options
• C) Cost of common shares
• D) Cost of bonds

What will be NPV of a project if PV of cash inflows is Rs. 550,000 and initial investment is Rs. 600,000?

• A) Rs. 550,000
• B) Rs. 600,000
• C) Rs. 50,000
• D) Rs. 1,150,000

All are the examples of non-cash items EXCEPT:

• A) Financial charges
• B) Bad debts
• C) Depreciation
• D) Amortization

Cost of debt includes:

• A) Cost of debentures
• B) Cost of fixed income securities
• C) All of the given options
• D) Cost of bonds

What will be cost of preferred shares if a company is paying Rs. 12 per share dividend and the shares are selling Rs. 95 per share in the market?

• A) None of the given options
• B) 7%
• C) 15%
• D) 12.63%

What will be weighted average cost of capital if a company has 50% debt with a cost of 15% and 50% equity with a cost of 18%? (Tax rate = 35%)?

• A) 15%
• B) None of the given options
• C) 13.875%
• D) 18%

Which of the following is(are) used for estimating cash flows?

• A) All of the given options
• B) Incremental Cash Inflow
• C) Initial Cash Outflow
• D) Terminal Cash Flow

Which of the followings is true with respect to straight line method of depreciation?

• A) Depreciation expense remains constant every year
• B) None of the given options
• C) Depreciation expense increases every year
• D) Depreciation expense decreases every year

Generally, net working capital is defined as:

• A) Total assets
• B) Current assets minus current liabilities
• C) Current assets
• D) Current liabilities

The beta of the risk free asset is:

• A) 0.00
• B) -1.00
• C) 1.00
• D) 0.50

Which of the following statement is TRUE in regards to conservative approach to financing working capital?

• A) Financing the short term needs of the business through short term debt
• B) Financing the seasonal needs of the business through equity
• C) Financing the short term needs of the business through long term debt
• D) Financing the long term needs of the business through short term debt

Which of the following statement is TRUE in regards to hedging approach to financing working capital?

• A) Financing the seasonal needs of the business through long term debt
• B) Financing the short term needs of the business through short term debt
• C) Financing the short term needs of the business through long term debt
• D) Financing the long term needs of the business through short term debt

Which of the following costs are associated with inventory?

• A) Inventory purchase price
• B) Holding costs
• C) All of the given options
• D) Re-order costs

Which of the following is correct formula for per-unit contribution margin?

• A) Sales / Contribution margin per unit
• B) Fixed cost / Contribution margin per unit
• C) Sales per unit - Variable cost per unit
• D) Total contribution margin/ Sales

Which of the following statement is TRUE, if contribution margin is positive?

• A) Profit will only occur if the contribution margin is less than the fixed expenses
• B) Both profit and loss can occur
• C) Profit will occur
• D) Loss will occur if the contribution margin is higher than fixed expenses