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The Project Cash Flows and NPVs for Projects a and B

question 78

Multiple Choice

The project cash flows and NPVs for Projects A and B are provided in the table below. Which project has a higher profitability index?  Project A  Project B  Year 0 $1,900$2,000 Year 1 $2,500$1,550 Year 2 $1,500$1,900 NPV $1,408.12$784.50\begin{array} { | c | c | c | } \hline & \text { Project A } & \text { Project B } \\\hline \text { Year 0 } & - \$ 1,900 & - \$ 2,000 \\\hline \text { Year 1 } & \$ 2,500 & \$ 1,550 \\\hline \text { Year 2 } & \$ 1,500 & \$ 1,900 \\\hline \text { NPV } & \$ 1,408.12 & \$ 784.50 \\\hline\end{array}

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Definitions:

Treatments

In the context of experiments, interventions applied to subjects or conditions under study to observe potential changes.

Mean Square

The average of the squared differences from the mean, used in variance and ANOVA calculations.

Error

The difference between a measured or observed value and the true value, indicating inaccuracies in data collection or analysis.

Mean Square

A statistical measure representing the average of the squared differences from the mean, often used in variance and regression analysis.

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