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B Com Exam  >  B Com Tests  >  Test: Investment Decisions - 1 - B Com MCQ

Test: Investment Decisions - 1 - B Com MCQ


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10 Questions MCQ Test - Test: Investment Decisions - 1

Test: Investment Decisions - 1 for B Com 2024 is part of B Com preparation. The Test: Investment Decisions - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Investment Decisions - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Investment Decisions - 1 below.
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Test: Investment Decisions - 1 - Question 1
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What is the primary purpose of fixed asset management in organizations?

Detailed Solution for Test: Investment Decisions - 1 - Question 1
Fixed asset management primarily aims to track and manage fixed assets for financial accounting, preventive maintenance, and theft deterrence. It helps organizations maintain control over their assets, understand their depreciation, and ensure they are in good condition for efficient operations.
Test: Investment Decisions - 1 - Question 2
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Which technology is commonly used for tracking fixed assets and allows for easy and accurate reading?

Detailed Solution for Test: Investment Decisions - 1 - Question 2
Serial numbered asset tags with barcodes are commonly used for tracking fixed assets. These tags make it easy to identify and read assets accurately, facilitating efficient asset management and inventory tracking.
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Test: Investment Decisions - 1 - Question 3
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What is the main purpose of asset tracking software for businesses?

Detailed Solution for Test: Investment Decisions - 1 - Question 3
Asset tracking software is primarily used by businesses to track and manage valuable assets such as equipment and supplies. It helps in maintaining control over these assets, reducing losses, and ensuring efficient maintenance.
Test: Investment Decisions - 1 - Question 4
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Which principle of capital budgeting emphasizes that decisions should be based on incremental cash flows?
Detailed Solution for Test: Investment Decisions - 1 - Question 4
Principle 1 of capital budgeting emphasizes that decisions should be based on incremental cash flows, which represent the changes in cash flow if the project is undertaken. This principle helps in evaluating the true financial impact of a project.
Test: Investment Decisions - 1 - Question 5
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Why is the timing of cash flows crucial in capital budgeting?
Detailed Solution for Test: Investment Decisions - 1 - Question 5
The timing of cash flows is crucial in capital budgeting because it is dependent on the time value of money. Cash received earlier is worth more in the future, so understanding the timing of cash flows is essential for accurate financial analysis.
Test: Investment Decisions - 1 - Question 6
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What is the key reason for measuring cash flows on an after-tax basis in capital budgeting?
Detailed Solution for Test: Investment Decisions - 1 - Question 6
Measuring cash flows on an after-tax basis in capital budgeting is essential because it allows for the evaluation of a project's present value accurately. This approach considers the cash flow that the company gets to keep after accounting for taxes, leading to more realistic financial assessments.
Test: Investment Decisions - 1 - Question 7
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What are the variables used in the analysis mentioned in the text?
Detailed Solution for Test: Investment Decisions - 1 - Question 7
The analysis mentioned in the text utilizes various variables, including capital expenditures, profits, sales changes, gross fixed assets, depreciation charges, utilization of capacity, expansion and replacement ratios, age of capital stock, and flow of funds. These variables are used to study the relationship between different factors and capital expenditure decisions of firms.
Test: Investment Decisions - 1 - Question 8
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What is the purpose of eliminating extreme values in the data?
Detailed Solution for Test: Investment Decisions - 1 - Question 8
Eliminating extreme values in the data, as mentioned in the text, serves the purpose of improving the analysis of capital expenditures
Test: Investment Decisions - 1 - Question 9
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What is the primary purpose of using asset location tracking software?
Detailed Solution for Test: Investment Decisions - 1 - Question 9
Asset location tracking software is primarily used to determine the physical location of assets. It helps organizations keep tabs on where their assets are located, making it easier to manage and maintain them efficiently.
Test: Investment Decisions - 1 - Question 10
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Which principle of capital budgeting emphasizes that financing costs should be reflected in a project's required rate of return?
Detailed Solution for Test: Investment Decisions - 1 - Question 10
Principle 5 of capital budgeting emphasizes that financing costs should be reflected in a project's required rate of return. This principle recognizes that a project's expected rate of return should account for the cost of capital and potential risks associated with financing.
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