Classical

Financial Accounting - Financial Accounting Objective Type Questions

26:  

Capital budgeting is

A.
Actually the process of making investment decisions in capital expenditure
B.

A profit

C.

A sales

D.

A cost

 
 

Option: A

Explanation :


27:  
There is deterioration in the management of work capital of XYZ Ltd. What does it refer to?
A.

That capital employed has reduced

B.

That the profitability has gone up

C.

That sales has decreased

D.

That debtors collection period has increased

 
 

Option: D

Explanation :


28:  
Payback reciprocal method of ranking investment proposals should be used only when
A.
Annual savings are even for the entire period
B.
The econontic life of the project is at least twice of the pay back period
C.

(A) and (B) both

D.

None of the above

 
 

Option: C

Explanation :


29:  
Working capital can be used for the purchase of
A.

machinery

B.

goodwill

C.

raw material

D.

land & building

 
 

Option: C

Explanation :


30:  

Capital budgeting is known as

A.

Cost of Product

B.

Capital Expenditure

C.

Cost of Sales

D.

Profit

 
 

Option: B

Explanation :




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