(A) Positive rate of return (X)
(B) Negative rate of return (X)
(C) External rate of return (X)
(D) Internal rate of return ()
Answers: In internal rate of returns, discount rate which forces net present values to become zero is classified as Internal rate of return.
(A) Optimal capital budget ()
(B) Minimum capital budget (X)
(C) Maximum capital budget (X)
(D) Greater capital budget (X)
Answers: Set of projects or set of investments usually maximize firm value is classified as Optimal capital budget.
(A) Positive ()
(B) Negative (X)
(C) Zero (X)
(D) One (X)
Answers: Modified rate of return and modified internal rate of return with exceed cost of capital if net present value is Positive.
(A) Zero economic value added (X)
(B) Percent economic value added (X)
(C) Negative economic value added ()
(D) Positive economic value added (X)
Answers: In capital budgeting, a negative net present value result in Negative economic value added.
(A) Payback period ()
(B) Forecasted period (X)
(C) Original period (X)
(D) Investment period (X)
Answers: Number of years forecasted to recover an original investment is classified as Payback period.
(A) Capital budgeting ()
(B) Cost budgeting (X)
(C) Book value budgeting (X)
(D) Equity budgeting (X)
Answers: Process in which managers of company identify projects to add value is classified as Capital budgeting.