Based on the Profitability Index (PI) Rule, Should a Project

question 61

Multiple Choice

Based on the profitability index (PI) rule, should a project with the following cash flows be accepted if the discount rate is 8 %? Why or why not?

• A) Yes; because the PI is.98
• B) Yes; because the PI is 1.03
• C) No; because the PI is.95
• D) No; because the PI is.98
• E) No; because the PI is 1.03

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Definitions:

Patterning

The recurring or organized arrangement of elements in a particular sequence or design.

Construct

Bipolar quality or continuum used to classify people.

Selective Perception

Process of seeing, hearing, or making sense of the world around us based on such factors as our personality, beliefs, attitudes, hopes, fears, and culture, as well as what we like and do not like.

Punctuation

Process of making sense out of stimuli by grouping, dividing, organizing, separating, and categorizing information.