In financial management, the 'Cost of Capital' is: MCQ with Answer and Explanation

In financial management, the 'Cost of Capital' is:
A. The minimum return required by investors
B. The total cost of setting up a business
C. The depreciation cost
D. The interest paid on loans
Answer: Option A
Solution (By JKSSB Mock Tests)
The cost of capital is the minimum rate of return that a company must earn on its investments to satisfy its investors and creditors.

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Practice More Accountancy and Book Keeping Questions

Question #1
Social Accounting is also known as:
A. All of these
B. Environmental accounting
C. Green accounting
D. Social responsibility accounting

Correct Answer: Option A


Explanation:
Social accounting encompasses reporting on social, environmental, and ethical impacts, often termed social responsibility accounting, environmental accounting, or green accounting.

Question #2
Which of the following is NOT a functional budget?
A. Materials Budget
B. Sales Budget
C. Master Budget
D. Production Budget

Correct Answer: Option C


Explanation:
The Master Budget is a summary budget incorporating all functional budgets (like sales, production) into a projected P&L and Balance Sheet.

Question #3
The 'Commodities Transaction Tax' (CTT) is levied on:
A. Only gold
B. All commodities
C. Non-agricultural commodity derivatives
D. Agricultural commodities

Correct Answer: Option C


Explanation:
CTT is levied on trading in non-agricultural commodity derivatives.