A Project Has Been Assigned a Required Annual Accounting Return

question 217

Multiple Choice

A project has been assigned a required annual accounting return of 14% and a required discount rate of 9%. The initial cost of the project is $25,000. The project produces annual cash flows of $9,876 a year for three years. What is the profitability index of this project?

• A) .92
• B) 1.00
• C) 1.03
• D) 1.09
• E) 1.19

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Definitions:

Douche

Vaginal irrigation, which can be used to administer vaginal medication in liquid form.

Diluent

A liquid used to dissolve and dilute another substance, such as a drug.

Sublingual Medication

Drugs that are administered by being placed under the tongue for absorption through the mucous membranes into the bloodstream for faster action.

Oral Route

A method of drug administration where medication is taken through the mouth.