Question
Answer the following MCQs - 29)The Bombay Company has gathered the following data on a proposed investment: Initial investment required: Rs.800,000, Average returns after tax:Rs.120000,
Answer the following MCQs - 29)The Bombay Company has gathered the following data on a proposed investment: Initial investment required: Rs.800,000, Average returns after tax:Rs.120000, Discount rate: 12% and Salvage value: Rs.0. Based on the above information, the accounting rate of return is: Select one: a. 22.5% b. 30% c. 15% d. 35%
30)Calculate the degree of operating leverage (DOL) at 400,000 units of quantity sold if the firm has Rs 1,000,000 in fixed costs and the firm anticipates selling each unit for Rs 25 with variable costs of Rs 5 per unit. Select one: a. 3.33 b. 1.25 c. 1.14 d. Insufficient Information
19)Which of the following approaches advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies? Select one: a. Net Income Approach. b. Net Operating Income Approach. c. Traditional Approach. d. Modigliani-Miller Approach
20)Capital Budgeting is a part of____. Select one: a. Investment Decision b. Working Capital Management c. Marketing Management d. Capital Structure
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