Statement-I: In the payback period method, the risk of the project is adjusted by lessening the target payback period.
Statement-II: Sensitivity analysis helps in the calculation of the net present value of the proposal.
A. Statement-I is correct, but statement-II isincorrect
B. Statement-I is incorrect, but statement-II is correct
C. Statement-I and statement-II are correct
D. Statement-I and statement-II are incorrect
Answer: Option A
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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