1. Which of the following is the first step in capital budgeting process?

A) Final approval.
B) Screening the proposal.
C) Implementing proposal.
D) Identification of investment proposal.



2. A project costs Rs, 1,00,000 annual cash flow of Rs. 20,000 for 8 years. Its payback period is ______________.

A) 1 year.
B) 2 years.
C) 3 years.
D) 5 years.



3. Which form of market efficiency states that current prices fully reflect the historical sequence of prices?

A) Weak.
B) Semi-strong.
C) Strong.
D) Highly strong.



4. __________ is a payment of additional shares to shareholders in lieu of cash.

A) Stock split.
B) Stock dividend.
C) Extra dividend.
D) Regular dividend.



5. Land at prime locations, modern buildings, machinery in good condition, etc are accepted as __________.

A) Funds.
B) Security.
C) Liquid cash.
D) Debt.