Question 1

Cash Inflows from a project include

Accepted Answer

The answer of Cash Inflows from a project include
...

Question 2

If capital expense is recorded as revenue expense then which calculation will be wrong?

Accepted Answer

Recording a capital expense as a revenue expense would lead to an overstatement of expenses in the income statement, which would in turn reduce the net profit. Bank balance, debtors, and creditors are not directly affected by the classification of expenses as capital or revenue.

Question 3

In Capital Budgeting, Sunk cost is excluded because it is

Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered, so they are not considered in capital budgeting decisions because they are not incremental to the decision at hand. Incremental costs are those that change as a result of a new decision.

Question 4

Which of the following is not a capital budgeting decision?

Accepted Answer

Inventory level decisions are considered as part of working capital management, not capital budgeting. Capital budgeting decisions typically involve long-term investments in assets or projects, such as expansions, mergers, or asset replacements.

Quiz 5: Business Finance and Audit

Cash Inflows from a project include

If capital expense is recorded as revenue expense then which calculation will be wrong?

In Capital Budgeting, Sunk cost is excluded because it is

Which of the following is not a capital budgeting decision?