Podcast
Questions and Answers
What is the formula for annual after-tax cash inflow of a project?
What is the formula for annual after-tax cash inflow of a project?
- (R – C) (1 – T) - D
- (R + C – D) (1 – T) + D
- (R – C – D) (1 – T) + D (correct)
- (R – C) (1 + T) + D
How does inflation affect the actual rate of return?
How does inflation affect the actual rate of return?
- It has no effect on the actual rate of return
- It reduces the actual rate of return (correct)
- It increases the actual rate of return
- It stabilizes the actual rate of return
What is the real net cash flow after deflating for an inflation rate of 10%?
What is the real net cash flow after deflating for an inflation rate of 10%?
- ` 32,000
- ` 27,513
- ` 29,091 (correct)
- ` 30,000
What is the formula for the required rate of return in nominal terms accounting for inflation?
What is the formula for the required rate of return in nominal terms accounting for inflation?
How does the cost of capital considered for investment appraisals change with anticipated inflation?
How does the cost of capital considered for investment appraisals change with anticipated inflation?
In practice, investment projects are exposed to various types of factors. Which of the following is NOT one of these factors?
In practice, investment projects are exposed to various types of factors. Which of the following is NOT one of these factors?
Which of the following is NOT an assumption made while discussing capital budgeting or investment evaluation techniques at intermediate level?
Which of the following is NOT an assumption made while discussing capital budgeting or investment evaluation techniques at intermediate level?
What is the main reason for adjusting for inflation in capital investment appraisal?
What is the main reason for adjusting for inflation in capital investment appraisal?
What is the necessity for incorporating risk in capital budgeting?
What is the necessity for incorporating risk in capital budgeting?
Why is it important to consider change in technology as a factor impacting investment projects?
Why is it important to consider change in technology as a factor impacting investment projects?
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