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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 ₹...

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