Financial Management-Capital Budgeting Decisions- Risk Analysis (CBSE-NET (UGC) Management (Paper-II & Paper-III)): Questions 1 - 3 of 4

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Question number: 1

» Financial Management » Capital Budgeting Decisions- Risk Analysis

Appeared in Year: 2014

MCQ▾

Question

The capital budgeting appraisal criterion that is most appropriate in the situation of capital rationing will be (June paper II)

Choices

Choice (4) Response

a.

Internal Rate of Return

b.

Payback period

c.

Net present value

d.

Profitability index

Question number: 2

» Financial Management » Capital Budgeting Decisions- Risk Analysis

Appeared in Year: 2015

MCQ▾

Question

Statement – I: In general, the NPV and IRR methods lead to the same acceptance orrejection decision when a single project is involved.

Statement – II: The inconsistency in ranking of competing projects as per the NPV and IRRmethods lies in the implicit assumptions with regard to different rates of returns on re-investment of intermediate cash flows. (Dec)

Choices

Choice (4) Response

a.

Statement – I is incorrect while Statement – II is correct

b.

Statement – I is incorrect and Statement – II is correct

c.

Statement – I is correct while Statement – II is incorrect

d.

Statement – I is correct and Statement – II is correct

Question number: 3

» Financial Management » Capital Budgeting Decisions- Risk Analysis

Appeared in Year: 2014

MCQ▾

Question

Indicate the statement which is not correct:

i. Credit risk is loss on account of default of repayment of loan.

ii. Liquidity risk is the risk on account of the mismatches of cash inflow and outflow in a firm.

iii. Basic risk is the risk in a firm owing to the differences in the index to which financial assets and liabilities are tied up.

iv. Forward rate agreement is a contract where a borrower/lender locks the interest rate and protects itself from the loss on account of change in the future interest rate. (June Paper II)

Choices

Choice (4) Response

a.

ii & iii

b.

i and ii

c.

iii & iv

d.

None of the above

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