C-06 — Capital Budgeting

What is capital budgeting?

Which one is an example of a long-term investment decision mentioned in the textbook?

Capital budgeting decision starts from?

Cash inflow of a project is calculated as?

If inflow appears higher than outflow, the investment decision is considered?

Which one is NOT within the scope of capital budgeting decision?

In capital budgeting context, "income" means?

Which is NOT an expenditure component in capital budgeting?

Profit before tax is obtained by?

Net profit is obtained by?

Modernization of a fixed asset falls under which decision?

Consider the following statements about the scope of capital budgeting:

As per the textbook, the main objective of a business is?

Capital budgeting is called "profit oriented" because it?

Capital budgeting decisions usually involve?

Mistakes in capital budgeting decisions usually?

Capital budgeting is risk oriented because most factors used are based on?

An umbrella producer expands capacity expecting heavy rainfall, but rainfall does not occur. The producer faces?

In long-term financing, capital budgeting techniques play an important role in?

A good investment decision can ensure?

Consider the following points about the importance of capital budgeting:

Which one is an application of capital budgeting?

A restaurant owner purchasing chair, table and fridge is an application of?

The main intention of business expansion as per the textbook is?

A tailoring shop owner buys a new sewing machine considering high Eid demand. This is an example of?

A Mango Juice producer decides to produce Apple Juice and Orange Juice as well. This is?

A replacement decision is profitable when?

A saloon owner buys a modern technology based hair cutting machine. This is an application of?

Consider the following applications:

The first step of capital budgeting process is?

In a business, cash inflow occurs from?

Cash outflow in a business occurs from?

Which one is a current expense?

Which one is a fixed cost?

Discount rate is used to convert?

Other things remaining equal, the later the cash flow, the ___ the present value?

Generally in capital budgeting decisions, discount rate is considered as?

After estimation of cash flow and discount rate, the next step is?

Consider the following steps of capital budgeting:

Which one is NOT a capital budgeting technique?

ARR stands for?

PBP stands for?

NPV stands for?

IRR stands for?

In ARR method, instead of cash flow ___ is used?

Formula for ARR is?

Average investment is calculated as?

Decision rule of ARR method is?

The biggest limitation of ARR method is?

In the textbook example, ARR of Project A is?

In the textbook example, ARR of Project B is?

Comparing Project A (ARR 26.70%) and Project B (ARR 26.60%), the father decides to invest in?

Average profit of Project A in the textbook example is?

Average investment of Project A (initial Tk 1 crore, salvage 0) is?

Pay-Back Period is?

PBP formula when cash flows are equal each year?

A tailor's machine costs Tk 15,000 and yields yearly inflow Tk 5,000. PBP is?

For mixed stream of cash flow, PBP is calculated using?

In the textbook example, Pay-Back Period of Project A is?

In the textbook example, Pay-Back Period of Project B is?

Decision rule of Pay-Back Period method is?

A larger Pay-Back Period indicates?

Which of the following is NOT a limitation of Pay-Back Period method?

PBP method is not applicable when?

Cash flow is calculated by?

Among the capital budgeting methods, which two are more acceptable per the textbook?

NPV and IRR are more acceptable than other methods because they?

Consider the following limitations of Pay-Back Period method:

Consider the following limitations of ARR method:

Which is the evaluation method of investment below?

Which is the equation of calculating the payback period?

What is called the difference between cash flow and net profit?

Which Technique of capital budgeting is important?

Dr. Shamima has founded and directed a hospital by investing her own capital. Which decision will she take through capital budgeting?

Chief managing director of Shemanto Company Miss Borna has divided total profit by 4 before calculating the profitability of investment of 4 years without adding depreciation. But total investment has been divided by 2. Which method was followed by Mrs. Borna?

Consider the following limitations of the method used by Mrs. Borna (dividing profit by 4 and investment by 2):

What is the discount rate?

Why is capital budgeting done?

What is the key to financial success of a business per the textbook?

Product diversification means?

How is cash flow forecasted?

Why is capital budgeting assumption based?

Mr. Deep's new machine costs Tk 3,00,000 (salvage Tk 1,00,000, life 5 years) with annual cash inflows Tk 70,000, 90,000, 60,000, 55,000 and 40,000. Pay-Back Period is approximately?

For Sampy Ltd. project, initial investment is Tk 5 crore (no salvage given). Average investment is?

Mr. Bipul collected sugar in March hoping price will rise after the budget; later faced loss. His decision was?

In the Project A example, depreciation per year is?

Depreciation cost is calculated as?

In the Project B example, fixed cost per year is?

In the Project A example, current cost is what percentage of sales?

Tax rate assumed in the textbook Project A & B examples is?

If investment is Tk 50,000 and yearly equal cash inflow is Tk 10,000, the Pay-Back Period is?

Mr. Deep's machine cumulative cash inflow at the end of year 3 is?