Present value of outflows= Rs. 165,500
Present value of inflows= Rs. 269,300
Profitability index= ?

• A) 0.91
• B) 1.63
• C) 0.61
• D) 1.51

Residual Income is evaluation measure of which of the following?

• A) None of the given options
• B) Profit center
• C) Investment center
• D) Cost center

Which of the following is most appropriate for Economic Value Added (EVA)?

• A) It measures the Economic performance of division.
• B) It measures the operating expenses of division.
• C) It measures the Accounting profit of division.
• D) It measures the net income of division.

Following information has been extracted for the year to calculate the sales margin of RC Company.
Cost of Capital: Rs. 340,000 and Net income: Rs. 250,000 and Sales revenue: Rs.700,000
Find the sales margin with the help of provided information.

• A) 74 %
• B) 36 %
• C) 84 %
• D) 13 %

It is assumed that the initial investment for “Project A” is Rs. 170,000. Cash flows are Rs. 40,000, Rs. 90,000, and Rs. 50,000 in the first, second third year respectively.
Required: Identify the payback period of Project A.

• A) 3.00 year
• B) 2.80 year
• C) 2.00 year
• D) 2.40 year

Project with unconventional cash flows can have either ………………or ………………… IRR.

• A) Positive, double
• B) Single, double
• C) Double, positive
• D) Negative, multiple

Which of the following is not an advantage of IRR?

• A) Results are expressed as a simple percentage
• B) It takes into account the time value of money
• C) It is easily understood as compare to other methods
• D) Unconventional cash flows can have negative IRR

Following information has been extracted for the year to find the Return on Investment of ABC Company.
Return: Rs. 590,000; investment: Rs. 4,690,000 and Sales: Rs. 4,900,000
Find the Return on Investment with the help of provided information.

• A) 36%
• B) Required more information
• C) 13%
• D) 1.04%

A rational investor accepts the project if the net present value of the project is __________ and rejects if net present value of the project is ________.

• A) Positive; negative
• B) Negative; negative
• C) At breakeven point; positive
• D) Positive; at breakeven point

Which of the following is (are) benefit(s) of Critical Path Method (CPM)?

• A) Useful in monitoring costs
• B) Mathematically simple
• C) All of the given options
• D) Give critical path and slack time

Which of the following statement is correct for “Project Evaluation & Review Technique”?

• A) It shows the inter relationship of various jobs which makeup the overall project and clearly identify the critical path of the project.
• B) It focuses on successful completion of program in the shortest possible time.
• C) It was developed by US navy for planning and controlling of Polaris missile program.
• D) All of the given options

Cost based transfer pricing is appropriate:

• A) Whenever profit responsibility is centralized and each division is operated on a cost center basis.
• B) Whenever profit responsibility is decentralized and each division is operated on a cost center basis.
• C) Whenever profit responsibility is centralized and each division is operated on a profit center basis.
• D) Whenever profit responsibility is decentralized and each division is operated on a standard cost basis.

A project is considered as……………. if the cash flows of one are unaffected by the acceptance of the other.

• A) Mutually exclusive
• B) Independent
• C) Dependent
• D) Acceptable

Which of the following capital budgeting techniques provides that value of an asset today is equal to sum of present values of future cash flows?

• A) Internal rate of return
• B) Profitability index
• C) Net present value
• D) Payback period

Following information for certain period has been extracted from the books of a manufacturing concern to find the value of Operating Cash flow.
Net Profit before tax: Rs. 793,600; tax rate: 35% and depreciation: Rs. 500,000

• A) Rs. 500,000
• B) Rs. 550,840
• C) Rs. 550,840
• D) Rs. 1,015,840

Actual hours worked= 4,000
Standard labor rate=180 Rs. Per hour
Actual labor rate= 200 Rs. Per hour
Labor rate variance= ?

• A) Rs. 80,000 Favorable
• B) Rs. 800,000 Adverse
• C) Rs. 800,000 Favorable
• D) Rs. 80,000 Adverse

Sales price per unit= Rs.30.50
Variable cost per unit=Rs.12.50
Contribution to sales ratio= ?

• A) .65
• B) .59
• C) .15
• D) .45

Which of the following is a vital role of variance analysis in decision making?

• A) All of the given options
• B) To analyze the total variance into elements
• C) To take corrective actions
• D) To establish responsibility

Under standard costing what will be done if actual varies favorably or unfavorably from the standards?

• A) All of the given options
• B) Analysis of variance
• C) Reporting of variance
• D) Investigation of variance

Fixed costs of XYZ company was of Rs. 5,500, and sold 30 units for Rs. 140 each. The total variable costs were Rs. 1,600. What is the net income or loss of the Company?

• A) Rs. 2,900 loss
• B) Rs. 2,600 loss
• C) Rs. 2,600 profit
• D) Rs. 2,900 profit