1) What is Capital Investment? a) It involves using the resources of the business to purchase or create longer-term assets, for example a new building, machine, or vehicle. b) It does not involve using the resources of the business to purchase or create longer-term assets, for example a new building, machine, or vehicle. c) The resources are limited it is essential that all decisions are consistent with theobjectives of the business and provide the greatest benefit. d) resources are not limited it is essential that all decisions are consistent with theobjectives of the business and provide the greatest benefit. 2) What does a capital investment project involve? a) It involves spending money now in order to receive benefits (or reduce costs) in future years. b) It does not involve spending money now in order to receive benefits (or reduce costs) in futureyears. c) Businesses need to apply capital appraisal methods to ensure correct decisions are made and that benefits are maximised. d) Businesses do not need to apply capital appraisal methods to ensure correctdecisions are made and that benefits are maximised. 3) Choose the Capital Investment Appraisal methods a) Payback Period b) Discounted cash flow  c) net present value d) Gross present value e) Reduced cash flow  4) Choose the right definitions a) It is a method of capital investment appraisal which recognises that money has a timevalue. b) Payback is the period of time it takes for the final cost of capital investment to be paid from net cash flow outflows. c) It is not a method of capital investment appraisal which recognises that money has a timevalue. d) Paybackis the period of time it takes for the initial cost of capital investment to berepaid from net cash flow inflows.

Capital Investment Appraisal Quiz - AAT - Management Accounting

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