1401. In_____ Certainty-equivalent approach, adjusted cash flows are discounted at _________.

A. Accounting rate of return
B. Internal rate of return
C. Hurdle Rate
D. Risk-free rate *

1402. Risk is capital budgeting is same as __________.

A. Uncertainty of cash flows
B. Probability of cash flows
C. Certainty of cash flows
D. Variability of cash flows *

1403. Which of the following is a risk factor in capital budgeting ?

A. Industry specific risk factors
B. Competition risk factors
C. Project specific risk factors
D. All of the above *

1404. In- Risk- adjusted discount rate method the normal rate of discount is ________

A. Increased *
B. Decreased
C. Unchanged
D. None of the above

1405. In risk-adjusted discount rate method, which one is adjusted ?

A. Cash flows
B. life of the proposals
C. Rate of discount *
D. Salvage value

1406. NPV of a proposal, as calculated by RADR real CE approach will be ________.

A. Same
B. Unequal *
C. Both A & B
D. None of A & B

1407. Risk of a capital budgeting can be incorporated _________.

A. Adjusting the cash flows
B. Adjusting the discount rate
C. Adjusting the life
D. All of the above *

1408. Which element of the basic NPV equation is adjusted by the RADR?

A. Denominator *
B. Numerator
C. Both
D. None

1409. Cost of capital refers to ________.

A. Flotation cost
B. Dividend
C. Required Rate of return *
D. None of the above

1410. Which of the following sources of funds has an implicit cost of capital ?

A. Equity share capital
B. Preference share capital
C. Debentures
D. Retained earnings *