Project whose cash flows are sufficient to repay capital invested for rate of return then net present value will be:
A. Negative
B. Zero
C. Positive
D. Independent
Other factors held constant, greater project liquidity is because of:
A. Less project returns
B. Greater project return
C. Shorter payback period
D. Greater payback period
An internal rate of return in capital budgeting can be modified to make it representative of:
A. Relative outflow
B. Relative inflow
C. Relative cost
D. Relative profitability
Situation in which firm limits expenditures on capital is classified as:
A. Optimal rationing
B. Capital rationing
C. Marginal rationing
D. Transaction rationing
Cash flows occurring with more than one change in sign of cash flow are classified as:
A. Non-normal cash flow
B. Normal cash flow
C. Normal costs
D. Non-normal costs
If net present value is positive, then profitability index will be:
A. Greater than two
B. Equal to
C. Less than one
D. Greater than one
Sum of discounted cash flows is best defined as:
A. Technical equity
B. Defined future value
C. Project net present value
D. Equity net present value
Cash outflows are costs of project and are represented by:
A. Negative numbers
B. Positive numbers
C. Hurdle number
D. Relative number
Reinvestment risk of bonds is higher on:
A. Short maturity bonds
B. High maturity bonds
C. High premium bonds
D. High inflated bonds
Type of bonds that pays no coupon payment but provides little appreciation are classified as:
A. Depreciated bond
B. Interest bond
C. Zero coupon bond
D. Appreciation bond
