Which of the following statements are true?
1. Pay-back period method considers all cash flows of a project
2. Pay-back period method concerns more with the recovery of cost than profitability
3. Net Present Value represents net addition to the wealth of shareholders
4. Accounting Rate of Return method incorporates risk as well as time value of money
Choose the correct option from those below:

Which of the following statements are true?
1. Pay-back period method considers all cash flows of a project
2. Pay-back period method concerns more with the recovery of cost than profitability
3. Net Present Value represents net addition to the wealth of shareholders
4. Accounting Rate of Return method incorporates risk as well as time value of money
Choose the correct option from those below: Correct Answer 2 and 3

Bissoy MCQ

Related Questions

The payback period can become an important issue when a large scope project is developed over several years. Maureen has been assigned the responsibility of calculating the payback period for her project that is to be completede in 3 years. The internal rate of return(IRR) is 7% and the annual savings will be $800,000 per year. The total cost is $4,000,000 and the rate of return during this time period is 3%. What is the payback period of Maureen's project?
Which of the following statements are true/ false?
1. Every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 9.33% of the salary or wages earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.
2. Bonus will be paid in cash to the employees.
3. If the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer is bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wages earned by the employee during the accounting year subject to a maximum of 10% of such salary or wage.
4. Bonus needs to be paid within a period of eight months from the close of the accounting year.
Arrange the following categories of cash inflows and cash outflows in a correct order.
1. Cash flows from investing activities.
2. Cash flows from financing activities.
3. Cash flows from operating activities.
Statement I: In payback period method, the risk of the project is adjusted by lessening the target payback period.
Statement II: Sensitivity analysis helps in calculation of net present value of the proposal.
Which of the following are examples of cash flow from operating activities as per AS-7?
1. Cash receipts from the sale of goods and the rendering of services.
2. Cash receipts from disposal of intangible assets.
3. Cash receipts from royalties, fees, commissions and other revenue.
4. Cash payments to suppliers for goods and services.
5. Cash proceeds from issuing shares or other similar instruments.
6. Cash payments to and on behalf of employees.
Select the correct answer:
Which of the following activities should be shown separately in the cash flow statement prepared as per Accounting Standard-3?
1. Cash flow from borrowing activities
2. Cash flow from operating activities
3. Cash flow from financing activities
4. Cash flow from investing activities
5. Cash flow from miscellaneous activitie
Which of the following activities should be shown separately in the cash flow statement prepared as per accounting standard-3?
I. Cash flow from borrowing activities.
II. Cash flow from operating activities.
III. Cash flow from financing activities.
IV. Cash flow from investing activities.
V. Cash flow from miscellaneous activities.
Directions : In each of the following questions a statement is given, followed by three conclusions. Give answer :

Statement : Quality of life of a person is not dependent only on his wealth.

Assumptions :
I. The aim of most people is just to acquire more wealth.
II. There are some factors other than wealth which contribute to the quality of life.
III. Wealth does not contribute to the quality of life at all.
An uncovered cost at start of year is Rs 200, full cash flow during recovery year is Rs 400 and prior years to full recovery is 3 then payback would be
An uncovered cost at start of year is Rs 300, full cash flow during recovery year is Rs 650 and prior years to full recovery is 4 then payback would be