42, Cost of capital means :
(^) Required rate of return (B) Dividend
(C) Floatation cost (D) None of the above

48. Which of the following projects does not involve a capital budgeting decision?
(ಗಿ) A proposal to purchase a computer system
(B) A proposal to replace a 2 years old company van with a new van

(C) A proposal by a retail food store to increase the number of cans of a particular
tomato paste held in inventory

(D) A proposal णिः 8-5 year research and development programme by a car
manufacturer to develop an engine that would get 100 miles per gallon

44. Which of the following cost of capital requires tax adjustment?
(4) Cost of debentures (B) Cost of preference shares
(C) Cost of equity shares (1) 0091 of retained earnings

45- Which of the following is not used in capital budgeting?
(A) Time value of money (B) Sensitivity analysis
(C) Cash flows (D) Net assets method

46. In capital budgeting sunk cost is excluded because it is :
(4) Not incremental (൫) Not reversible
(0) Involves small amount (D) All the above

47. Which of the following capital expenditure planning and control techniques has been
criticised because it fails to consider investment profitability?

(A) Index of profitability technique
(B) Discounted pay back technique
(C) Internal rate of return technique
(D) Net present value technique

48. The method of project selection which considers the time value of money in a capital
budgeting decision is accomplished by computing the :

(ಗ) Pay-back 8

(B) Accounting rate of return on initial investment
(C) Accounting rate of return on average investment
(D) Discounted cash flow

131/2015 8 A