Capital Budgeting and Cost Benefit Analysis
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- Capital Budgeting and Cost Benefit Analysisaccounting-mcqs › cost-accounting-mcqs › capital-budgeting-and-cost-benefit-analysis
- Published
- 27 Apr 2023
- Last updated
- 28 May 2026
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Based on the net present value criterion, which projects should be considered acceptable?
Multiple choice question for Capital Budgeting and Cost Benefit Analysis. Select an option, then review the explanation below.
Explanation
Projects are deemed acceptable if their net present value (NPV) is either zero or positive. A negative NPV indicates that the project's returns do not cover the initial investment, making it unacceptable. Therefore, both zero and positive NPVs are criteria for acceptance.
More Capital Budgeting and Cost Benefit Analysis MCQs
Practice related questions from the same subject.
- 1.Given a tax operating income of $885,000 annually and a net initial investment of $35,750,000, what is the percentage increase in average return?
- 2.What type of cash flows are utilized in both the net present value and internal rate of return methods?
- 3.What is obtained by dividing the sum of recovered working capital and the net initial investment by 2?
- 4.What term describes the project's anticipated financial loss or gain calculated by discounting all cash inflows and outflows at the required rate of return?
- 5.Which rate of return consists of both the risk-free component and the business risk component?