ACC501 Final Term MCQs 2026 by VUBuddy

Which of the following can be calculated if, average net income is divided by average book value?

1. AAR
2. Payback period
3. IRR
4. NPV

Correct answer: AAR

Your gain (or loss) on an investment that you buy is called your : A. Risk on investment B. Gain on investment C. Loss on investment

D. Return on investment

Which of the following is (are) a non-cash item(s) ?

1. Expenses
2. Revenue
3. Depreciation
4. All of the given options

Correct answer: Depreciation

The projected cash flows from a project are: Year 1: Rs. 100 Year 2: Rs. 300 Year 3: Rs. 400 Year 4: Rs. 800 The Project cost is Rs. 800. What would be the payback period for the project?

1. 3.67 Years
2. 3.00 Years
3. 2.00 Years
4. 2.67 Years

Correct answer: 3.00 Years

A Company has sold its asset for a price less than it book value, the company has: A. Gained capital gain

B. Gained Tax Shelter

C. All of the given options D. Incurred Tax Liability

Which of the following is the return that firm’s creditors demand on new borrowings ?

1. Cost of common equity
2. Cost of preferred stock
3. Cost of debt
4. Cost of retained earnings

Correct answer: Cost of debt

Which of the following is referred as the ratio of the standard deviation of a distribution to the mean of that distribution ?

1. Probability distribution
2. The expected return
3. The standard deviation
4. Coefficient of variation

Correct answer: Coefficient of variation

Internal Rate of Return (IRR) is sometimes referred to as: A. Simple Interest Rate

B. Economic Rate of Return

C. Required Rate of Return D. Compound Interest Rate

Which of the following is the most common capital budgeting technique?

1. Net Present Value
2. Internal Rate of Return
3. Profitability Index
4. Payback Period

Correct answer: Payback Period

A firm’s equity is worth 4 million and its debt is worth 2 million. What is the percentage of firm’s financing that is equity ?

1. 67%
2. 40%
3. 33%
4. 20%

Correct answer: 67%