Question : Which of the following statement is incorrect for capital budgeting decisions?
Option 1: The decisions have long term implications for the firm.
Option 2: These decisions involve large amount of funds.
Option 3: It involves less amount of risk.
Option 4: None of the above
Correct Answer: It involves less amount of risk.
Solution : Capital budgeting decisions involve huge funds. It affects the returns of the forms as a whole in the long term. So these decisions influence the overall business risk complexion of the firm.
Hence, option C is correct.
Question : Which of the following statements is incorrect?
Option 1: Fixed capital affects the long term growth of the business.
Option 2: Fixed capital involves large amount of funds.
Option 3: There is no risk involved in fixed capital.
Question : These decisions affect the growth,profitability and risk of business in the long run.
Option 1: Financing decisions
Option 2: Capital budgeting decisions
Option 3: Irreversible decisions
Question : Which of the following is not the importance of capital budgeting decision?
Option 1: Long term growth and effects
Option 2: Irreversible decisions
Option 3: Facilitates financial control
Option 4: Large amount of funds available
Question : Which of the following statement is incorrect for factors affecting requirement of fixed capital?
Option 1: The natural business determines the amount of fixed capital to a large extent.
Option 2: Firms which operate at small scale required large amount of fixed capital.
Option 3: Production techniques adopted by Business influence the requirement of fixed capital.
Question : Which feature of capital market is highlighted in the given statement? Statement: It is the nature the capital market to satisfy the long term financial needs of the government industrial sector.
Option 1: Long term securities
Option 2: Long term financing requirement
Option 3: Creating liquidity
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