1. Cash flows method, used by net present value method and internal rate of return are
a) vertical cash flows
b) discounted cash flows
c) lean cash flows
d) future cash flows
2. Working capital cash outflow, cash outflow to buy machine and cash inflow from machine are examples of
a) cash flow from operations
b) terminal disposal of investment
c) net initial investment
d) average return on investment
3. Decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as
a) net investment parity
b) inflation
c) purchasing parity
d) buying parity
4. If tax operating income is $885000 per year and net initial investment is $35750000 then increase in average is
a) 5.475% per year
b) 4.475% per year
c) 3.475% per year
d) 2.475% per year
5. If actual price input is $700, budgeted price of input is $400 and actual quantity of input is 50 units, then price variance will be
a) $15,000
b) $13,000
c) $11,000
d) $9,000
6. If real rate is 16% and an inflation rate is 8%, then nominal rate of return will be
a) 27.28%
b) 25.28%
c) 22.28%
d) 21.28%
7. Method, which calculates time to recoup initial investment of project in form of expected cash flows is known as
a) net value cash flow method
b) payback method
c) single cash flow method
d) lean cash flow method
8. Vertically upward dimension of cost analysis is also called
a) project dimension
b) accounting-period dimension
c) back-flush accounting dimension
d) lean accounting dimension
9. Rate of return to cover a risk of investment and decrease in purchasing power, as a result of inflation is known as
a) nominal rate of return
b) accrual accounting rate of return
c) real rate of return
d) required rate of return
10. Process of making long term decisions, for capital investment in projects is called
a) lead budgeting
b) lean budgeting
c) capital budgeting
d) relevant budgeting