The concept of 'Cost of Capital' is primarily used to evaluate: MCQ with Answer and Explanation

Question
The concept of 'Cost of Capital' is primarily used to evaluate:
A. Dividend declarations
B. Capital Budgeting projects
C. Inventory turnover
D. Working capital adequacy
Answer: Option B
Solution (By JKSSB Mock Tests)
Cost of capital serves as the discount rate or hurdle rate for evaluating long-term investment opportunities (capital budgeting).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Baggage Rules' under Customs provide for:
A. Duty on cargo
B. No allowance
C. Duty-free allowances for passengers arriving in India
D. Duty on all luggage
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Correct Answer: Option C

Explanation:
Baggage Rules specify the quantity and value of goods that can be brought duty-free.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is an indirect tax in India?
A. GST
B. Corporation tax
C. Income tax
D. Wealth tax
Discuss
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Correct Answer: Option A

Explanation:
GST is an indirect tax on supply of goods and services.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
When a firm borrows money from a bank, what is the impact on the accounting equation?
A. No change in total assets
B. Assets increase, Equity increases
C. Liabilities increase, Equity decreases
D. Assets increase, Liabilities increase
Discuss
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Correct Answer: Option D

Explanation:
Cash/Bank (Asset) increases, and Bank Loan (Liability) increases simultaneously.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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