Examine the following statements.
(i) Payback Period Method measures the true profitability of a project.
(ii) Capital Rationing and Capital Budgeting mean the same.
(iii) Internal Rate of Return and Time Adjusted Rate of Return are the same.
(iv) Rate of Return Method takes into account the time value of money.
A. (i), (ii) and (iii) are correct
B. (ii) and (iii) are correct
C. Only (iii) is correct
D. All (i), (ii), (iii) and (iv) are false
Answer: Option C
This Question Belongs to Commerce >> Business Finance
The appropriate ratio for indicating liquidity crisis is
A. Operating ratio
B. Sales turnover ratio
C. Current ratio
D. Acid test ratio
A. Net present value method
B. Internal rate of return method
C. Profitablity index method
D. None of the above
A. a-4, b-3, c-1, d-2
B. a-3, b-4, c-1, d-2
C. a-2, b-3, c-1, d-4
D. a-3, b-2, c-4, d-1
Which one of the following assumptions is not included in the James E. Walter Valuation model?
A. All financing by retained earnings only
B. No change in the key variables such as EPS and DPS
C. The firm has finite life
D. All earnings are either distributed as dividends or invested internally immediately
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