Bonds issued by corporations and exposed to default risk are classified as:
A. Corporation bonds
B. Default bonds
C. Risk bonds
D. Zero risk bonds
A type of project whose cash flows would not depend on each other is classified as:
A. Project net gain
B. Independent projects
C. Dependent projects
D. Net value projects
Net present value, profitability index, payback and discounted payback are methods to:
A. Evaluate cash flow
B. Evaluate projects
C. Evaluate budgeting
D. Evaluate equity
Cash inflows are revenues of project and are represented by:
A. Hurdle number
B. Relative number
C. Negative numbers
D. Positive numbers
Cash flow which starts negative than positive then again positive cash flow is classified as:
A. Normal costs
B. Non-normal costs
C. Non-normal cash flow
D. Normal cash flow
If two independent projects having hurdle rate, then both projects should:
A. Be accepted
B. Not be accepted
C. Have capital acceptance
D. Have return rate acceptance
In estimating value of cash flows, compounded future value is classified as its:
A. Terminal value
B. Existed value
C. Quit value
D. Relative value
In capital budgeting, positive net present value results in:
A. Negative economic value added
B. Positive economic value added
C. Zero economic value added
D. Percent economic value added
Life that maximizes net present value of an asset is classified as:
A. Minimum life
B. Present value life
C. Economic life
D. Transaction life
First step in calculation of net present value is to find out:
A. Present value of equity
B. Future value of equity
C. Present value cash flow
D. Future value of cash flow
