With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project
Decreases
Increases
Increases linearly
Remain constant
Correct Answer :
A. Decreases
Related Questions
The depreciation during the year 'n', in diminishing balance method of depreciation calculation, is calculated by multiplying a fixed percentage 'N' to the
Initial cost
Book value at the end of (n - 1)th year
Depreciation during the (n - 1)th year
Difference between initial cost and salvage value
If 'S' is the amount available after 'n' interest periods for an initial principal 'P' with the discrete compound interest rate 'i', the present worth is given by
(1 + i)n/S
S/(1 + i)n
S/(1 + in)
S/(1 + n)i
If an amount R is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of i is
R [{(1 + i)n - 1}/ i ]
R [{(1 + i)n - 1}/ i (1 + i)n]
R(1 + i)n
R/(1 + i)n
With increase in the discounted cash flow rate of return, the ratio of the total present value to the initial investment of a given project
Decreases
Increases
Increases linearly
Remain constant
A machine has an initial value of Rs. 5000, service life of 5 years and final salvage value of Rs. 1000. The annual depreciation cost by straight line method is Rs.
300
600
800
1000
Pick out the wrong statement.
Gross revenue is that total amount of capital received as a result of the sale of goods or service
Net revenue is the total profit remaining after deducting all costs excluding taxes
The ratio of immediately available cash to the total current liabilities is known as the cash ratio
Consolidated income statement based on a given time period indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
A series of equal payments (e.g., deposit or cost) made at equal intervals of time is known as
Perpetuity
Capital charge factor
Annuity
Future worth
Scheduling provides information about the
Proper utilisation of machines
Means to minimise idle time for machines
Time of completion of job
Time of starting of job and also about how much work should be completed during a particular period
The inventory of raw materials included in the working capital is usually about __________ months supply of raw materials valued at delivery prices.
One
Three
Six
Twelve
Factory manufacturing cost is the sum of the direct production cost
Fixed charges and plant overhead cost
And plant overhead cost
Plant overhead cost and administrative expenses
None of these
Which of the following is the cheapest material of construction for the storage of sodium hydroxide upto a concentration of 75%?
Stainless steel
Plain carbon steel
Nickel
Copper
Which of the following is not a current asset of a chemical company?
Inventories
Marketable securities
Chemical equipments
None of these
Pick out the wrong statement.
Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity)
Return on equity = profit after tax/net worth
Working capital turnover ratio = sales/net working capital
Total cost of production is more than net sales realisation (NSR) at breakeven point
Depreciation
Costs (on annual basis) are constant when the straight line method is used for its determination
Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
Does figure in the calculation of income tax liability on cash flows from an investment
All (A), (B) and (C)
Gross earning is equal to the total income minus
Total product cost
Fixed cost
Income tax
None of these
In a chemical process plant, the total product cost comprises of manufacturing cost and the
General expenses
Overhead cost
R & D cost
None of these
The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is
15%
10%
1.5%
150%
An investment of Rs. 100 lakhs is to be made for construction of a plant, which will take two years to start production. The annual profit from the operation of the plant is Rs. 20 lakhs. What will be the payback time?
5 years
7 years
12 years
10 years
The value of a property decreases __________ with time in straight line method of determining depreciation.
Linearly
Non-linearly
Exponentially
Logarithmically
Generally, income taxes are based on the
Total income
Gross earning
Total product cost
Fixed cost
Effective and nominal interest rates are equal, when the interest is compounded
Annually
Fortnightly
Monthly
Half-yearly
Effluent treatment cost in a chemical plant is categorised as the __________ cost.
Fixed
Overhead
Utilities
Capital
Annual depreciation cost are not constant when, the __________ method of depreciation calculation is used.
Straight line
Sinking fund
Present worth
Declining balance
Expenditure on research and development (R & D) is categorised as the __________, while making an estimate of the total product cost for a chemical plant.
Overhead cost
Fixed expenses
General expenses
Direct production cost
Which of the following elements is not included in the scope of market analysis?
Competition from other manufactures
Product distribution
Opportunities
Economics
Out of the following, the depreciation calculated by the __________ method is the maximum.
Diminishing balance
Straight line
Sum of the years digit
Sinking fund
Pick out the correct statement.
Difference between income and expense is termed as gross revenue
Unamortised cost is the difference between the original cost of a property and all the depreciation charges made to date
Sum-of-the-years-digits methods of depreciation calculation accounts for the interest on the investment
Scrap value is the net amount of money obtainable from the sale of used property over and above any charges involved in its removal & sale
Which of the following does not come under the sales expenses for a product of a chemical plant?
Advertising
Warehousing
Legal fees
Customer service
An investment of Rs. 1000 is carrying an interest of 10% compounded quarterly. The value of the investment at the end of five years will be
1000 (1 + 0.1/4)20
1000 (1 + 0.1)20
1000 (1 + 0.1/4)5
1000 (1 + 0.1/2)5
Annual depreciation costs are constant, when the __________ method of depreciation calculation is used.
Declining balance
Straight line
Sum of the years digit
None of these