22. Which of the following statements about capital rationing is correct? None o
ID: 2628855 • Letter: 2
Question
22.
Which of the following statements about capital rationing is correct?
None of the answers are correct.
24.
Consider the following net cash flows:
Year Cash Flow
0 $0
1 $250
2 $400
3 $500
4 $600
5 $600
What is the net present value if the opportunity cost of capital (discount rate) is 10 percent?
$715.87
25.
Consider the following net cash flows:
Year Cash Flow
0 $0
1 $250
2 $400
3 $500
4 $600
5 $600
What is the net present value if the opportunity cost of capital (discount rate) is 10 percent with an outflow (or cost) of $1,000 at Year 0?
-$2,715.87
38.
Which of the following items are part of a business's set of financial statements?
Statement of cash flows
39.
Which of the following statements about cash versus accrual accounting is most correct?
Under capital rationing, the typical approach is accept all projects with negative NPVs.Explanation / Answer
Answer to 22) capital rationing means allocation of limited capital available Hence the correct answer is 2 i.e Capital rationing occurs when a business does not have the capital necessary to fund all acceptable projects. Answer to 24) Year 10 Cash flow Dsic. Cash flow 0.00 1.00 0.00 0.00 1.00 0.91 250.00 227.27 2.00 0.83 400.00 330.58 3.00 0.75 500.00 375.66 4.00 0.68 600.00 409.81 5.00 0.62 600.00 372.55 1715.87 Correct answer is 2 Answer to 25) Year 10 Cash flow Dsic. Cash flow 0 1.00 -1000.00 -1000.00 1 0.91 250.00 227.27 2 0.83 400.00 330.58 3 0.75 500.00 375.66 4 0.68 600.00 409.81 5 0.62 600.00 372.55 715.87 Correct answer is 2 Answer to 38) Which of the following items are part of a business's set of financial statements? all are correct Answer to 39) Cash accounting means accounting as and when the cash is received. accrual acccounting means accounting when it has become due itself and not till it is received. Hence correct answer is 3 i.e In cash accounting, an event is recognized when a cash transaction occurs.
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