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Basics of Capital Budgeting Evaluating Cash Flows

Free 70+ Basics of Capital Budgeting Evaluating Cash Flows MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Practise below with answers and explanations.

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Basics of Capital Budgeting Evaluating Cash Flows — MCQs for Pakistan government job tests

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Basics of Capital Budgeting Evaluating Cash Flows

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1.Which of the following techniques are used to assess the viability of investment projects?

2.What do we call projects whose cash flows are not influenced by one another?

3.If a project's cash inflows are lower than the initial investment discounted at the required rate of return, what will be the net present value?

4.If the present value of expected future cash inflows is $4150 and the initial investment is $1300, what is the profitability index?

5.Which type of numbers represent the cash inflows, or revenues, of a project?

6.During extensive expansion initiatives, how do the heightened risks and flotation expenses of a project typically affect the marginal cost of capital?

7.If the initial investment is $6,000 and the profitability index is 5.6, what is the present value of the expected cash inflows?

8.Which concept leads to challenges such as a rising marginal cost of capital and the need for capital rationing?

9.Which capital budgeting approach relies on discounted cash flow analysis?

10.When calculating the worth of cash flows, the amount accumulated through compounding to a future date is known as the ________?

11.What type of cash flow begins with a negative amount followed by positive amounts twice?

12.Which type of numbers represent the cash outflows, or expenses, associated with a project?

13.When two independent projects each meet the required hurdle rate, what is the recommended decision regarding their acceptance?

14.What term describes the lifespan of an asset that yields the highest net present value?

15.What term describes the total value obtained by summing discounted cash flows?

16.What term describes the scenario where selecting one project results in the rejection of another competing project?

17.What is the initial step in computing the net present value (NPV)?

18.How are cash flows characterized when there is more than one sign change in the cash flow sequence?

19.When the net present value (NPV) is positive, what can be said about the profitability index?

20.What is the term for the ratio obtained by dividing the present value of expected future cash flows by the initial investment cost of a project?

How to prepare with Basics of Capital Budgeting Evaluating Cash Flows MCQs

  • Work through questions topic by topic, then revisit any you answered incorrectly.
  • Read explanations carefully—they often cover facts that repeat across PPSC, FPSC, and NTS papers.
  • Pair subject practice with past papers to see how Basics of Capital Budgeting Evaluating Cash Flows appears in real exam conditions.

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