Practice Capital Budgeting Questions and Answers

• Renting of immovable property is
• The rule for nominal accounts is
• Mr. Bhandari purchased a car for 50,000, making a down payment of 10,000 and signing a *40,000 bill payable due in 60 days. As a result of this transaction...
• At the end of the accounting year, all the nominal accounts of the ledger book are:
• Which of the following is/are examples of capital expenditure?
• Which of the following appears under the heading 'Reserves & Surplus' in the balance sheet?
• As per Schedule in of the Companies Act, 2013, a Company shall disclose by way of notes additional information regarding aggregate expenditure and income i...
• A service shall be a continuous supply of service agreed to he provided continuously or on recurrent basis under a contract when the period of service exce...
• In accordance with Ind AS 2, explain how the item should be measured: One of Company's product lines is beauty products, particularly cosmetics such as lip...
• According to IND AS 115, when can revenue be recognized?
• As per the Union Budget 2024-25, the Long-Term Capital Gains (LTCG) tax rate under sections 112A and 112 has been revised to _____
• All of the following are capital receipts, except ________
• A company is evaluating two mutually exclusive projects, A and B, both requiring an initial investment of ₹1,50,00,000. The cost of capital is 10%. The c...
• A firm evaluating two mutually exclusive projects uses NPV and IRR. Project A has higher NPV but lower IRR than Project B. Which project should be selected...
• Raman Ltd. is evaluating a new machine costing ₹60 lakhs with a useful life of 5 years. The expected annual operating cash inflows (after-tax) are ₹18 ...
• A firm is considering replacing its old machine with a new one. Old machine: Book value = ₹8L, Salvage = ₹2L New machine: Cost = ₹20L, Life = 5 years...
• Project A has NPV ₹8 lakh, IRR 15%. Project B has NPV ₹6 lakh, IRR 17%. If cost of capital is 12%, and projects are mutually exclusive, which should be...
• Which method in capital budgeting considers the time value of money but ignores cash flows beyond payback?
• ABC Ltd. is evaluating a project requiring an initial investment of ₹50 lakhs. The project is expected to generate cash flows of ₹15 lakhs per year for...
• ABC Ltd. is evaluating two projects. Project A requires ₹50 lakhs investment and offers IRR of 14%. Project B requires ₹40 lakhs and gives IRR of 12%. ...
• Raman Ltd. is evaluating a new machine costing ₹60 lakhs with a useful life of 5 years. The expected annual operating cash inflows (after-tax) are ₹18 ...
• Which of the following budgets is considered the primary budget prepared in a business organization?
• ABC Ltd operates at 80% capacity producing 16,000 units. The cost per unit is: • Direct Material ₹50 • Direct Labour ₹20 • Variable Overheads ₹...
• XYZ Ltd. is evaluating a project that requires an initial investment of ₹10 crore. The expected cash inflows over the next 5 years are uneven. The compan...
• A pharmaceutical company is evaluating a project with a 15-year horizon. The management is concerned about the time value of money and the project's long g...
• A telecom company is considering investing in a 4G expansion project with expected irregular cash inflows. The project shows multiple IRRs due to alternati...