Practice Test

Q1) In probability analysis Show Answer

Q2) Probability given in accurate result if it is Show Answer

Q3) Under standard deviation method dispersion of cash flows indicates that Show Answer

Q4) Co-efficient of variation indicates that Show Answer

Q5) Under co-efficient of variation select the project which has Show Answer

Q6) Decision tree is Show Answer

Q7) In capital rationing the company makes sure to take up only projects with high anticipated return on investment. Show Answer

Q8) In order to maximize shareholders’ wealth, the firm has to accept projects that minimize total value added. Show Answer

Q9) Under capital rationing in case of mutually exclusive projects, the company selects all projects which has a positive net present value Show Answer

Q10) Capital rationing is used where there are insufficient funds to invest. Show Answer

Q11) Hard capital rationing or “external” rationing occurs when the company faces problems in raising funds in the external equity markets. Show Answer

Q12) Capital rationing is selection of investment proposal under constraints Show Answer

Q13) Capital rationing is selection of the investment proposal without any constrains Show Answer

Q14) Capital rationing is caused by internal factors only Show Answer

Q15) Capital rationing is caused external factors only Show Answer

Q16) Capital rationing is caused by internal and external factors. Show Answer

Q17) Under capital rationing there is no limit on capital investments. Show Answer