A. And economic life of a project are the same
B. Is the length of time over which the earnings on a project equals the investment
C. Is affected by the variation in earnings after the recovery of the investment
D. All A, B. and C
Related Mcqs:
- An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time ?
A. 5 years
B. 7 years
C. 12 years
D. 10 years - The payback method for the measurement of return on investment___________________?
A. Gives a correct picture of profitability
B. Underemphasises liquidity
C. Does not measure the discounted rate of return
D. Takes into account the cash inflows after the recovery of investments - Direct costs component of the fixed capital consists of _____________________?
A. Contingencies
B. Onsite and offsite costs
C. Labour costs
D. Raw material costs - Relative cost of chemical process plants in India is about ______________ percent more than the similar plants in U.S.A ?
A. 15
B. 35
C. 55
D. 75 - A present sum of Rs. 100 at the end of one year, with half yearly rate of interest at 10%, will be Rs ?
A. 121
B. 110
C. 97
D. 91 - The amount of compounded interest during ‘n’ interest periods is_________________?
A. p[(1+i)n – 1)]
B. p(1 + i)n
C. p(1 – i)n
D. p(1 + in) - Pick out the wrong statement?
A. Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
B. Return on equity = profit after tax/net worth
C. Working capital turnover ratio = sales/net working capital
D. Total cost of production is more than net sales realisation (NSR) at breakeven point - Most chemical plants use an initial working capital amounting to 10-20% of the total capital investment. But this percentage may increase to ______________ percent in case of seasonal products manufacturing plant?
A. 30
B. 50
C. 75
D. 95 - Pick out the wrong statement ?
A. Debt-equity ratio of a chemical company describes the lenders contribution for each rupee of
owner’s contribution i.e., debt-equity ratio = total debt/net worth
B. Return on investment (ROI) is the ratio of profit before interest & tax and capital employed
(i.e. net worth + total debt)
C. Working capital = current assets + current liability
D. Turn over = opening stock + production closing stock - If an amount R is paid at the end of every year for ‘n’ years, then the net present value of the annuity at an interest rate of i is _________________?
A. R [{(1 + i)n – 1}/ i ]
B. R [{(1 + i)n – 1}/ i (1 + i)n]
C. R(1 + i)n
D. R/(1 + i)n
