The Profitability Index (PI) Rule Can Be Best Stated As

question 280

Multiple Choice

The profitability index (PI) rule can be best stated as:

• A) An investment is acceptable if its PI is greater than one.
• B) An investment is acceptable if its PI is less than one.
• C) An investment is acceptable if its PI is greater than the internal rate of return (IRR).
• D) An investment is acceptable if its PI is less than the net present value (NPV).
• E) An investment is acceptable if its PI is less than its payback.

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Definitions:

Transactional Leadership

A leadership style focused on the exchanges between leaders and followers, emphasizing rewards and punishments to motivate performance.

Contingent Reward

A leadership approach that involves the exchange of rewards for achieving defined performance standards.

Individualized Consideration

A leadership approach that involves giving personalized attention to followers, recognizing their unique needs, and encouraging their growth.

Management By Exception-Active

A leadership style where the leader actively monitors follower performance and takes corrective action primarily when deviations from standards occur.