The Profitability Index Allows Potential Investors To

question 63

Multiple Choice

The profitability index allows potential investors to:

• A) rank investments which use the rate of return approach.
• B) rank investments which use the net present value approach.
• C) rank investments by cash flow.
• D) rank investments which use the internal rate of return approach.

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Definitions:

Organized

The quality or state of being systematically arranged or structured, especially for efficiency or easy access.

Working Memory

A cognitive system with a limited capacity that is responsible for temporarily holding information available for processing.

Short-Term Memory

A psychological term referring to the capacity for holding a small amount of information in an active, readily available state for a short period of time.

Autobiographical

Pertaining to the events of one's own life history, often depicted in personal writings, narratives, or memoirs.