GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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No time disparity
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No capital Budget constraints
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Independent Investment project
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None of the above
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Detailed explanation-1: -Volume Disparity does not lead to conflict between NPV and IRR decisions. Thus, option 3 is the correct answer.
Detailed explanation-2: -Answer and Explanation: The correct option is Option (a). Corporate vision and mission are not a source of conflict because conflict is a kind of clash or misunderstanding that may occur between two or more individuals or groups.
Detailed explanation-3: -Accrual principle is not followed in capital budgeting.
Detailed explanation-4: -Conflicts in ranking of NPV and IRR arise when the project is mutually exclusive as in independent projects decisions are always clear. It becomes difficult to choose from higher NPV and higher IRR. Even size of the project and uneven cash flows can lead to ranking conflicts.
Detailed explanation-5: -Answer :-Average rate of return method is based on cash flows. 5. Which of the following is not a capital budgeting decision? Inventory control.