Use the Information for the Question(s)below

question 58

Multiple Choice

Use the information for the question(s) below.
The Sisyphean Company is planning on investing in a new project.This will involve the purchase of some new machinery costing $450,000.The Sisyphean Company expects cash inflows from this project as detailed below: The appropriate discount rate for this project is 16%.
-The profitability index for this project is closest to:

• A).44.
• B).26.
• C)0.39.
• D).34.

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Definitions:

Sole Proprietorship

A business structure in which a single individual owns and operates the business, bearing unlimited personal liability.

Owner

An individual or entity that holds the legal right or title to something, such as a business or property.

Going Concern Assumption

An accounting principle that assumes a company will continue to operate and remain solvent for the foreseeable future, affecting its financial reporting.

Operating Indefinitely

A business condition where it is expected that the company will continue its operations without a foreseeable end.