Practice Capital Budgeting Techniques (25) - Capital Budgeting Techniques

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9 questions

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3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is capital budgeting?
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Think about investment planning.
Question 2.
Name two traditional capital budgeting techniques.
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Relate them to basic evaluations.
3Question 3.
What is the formula to calculate the Payback Period?
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Think about recovering your initial costs.
4Question 4.
True or False: NPV is the difference between cash inflows and outflows.
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Consider the flow of money over time.
Question 5.
A company invests $500,000 in a new product line with expected annual cash inflows of $100,000 for 6 years. What is the Payback Period?
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What does it take to break even?
Question 6.
Evaluate whether to invest in a project with an initial outlay of $200,000, expected cash inflows of $50,000 each year for 5 years, and a discount rate of 8%. Calculate the NPV.
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Consider discounting cash flows back to present value.

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