Which One of the Following Is True If the Managers

question 108

Multiple Choice

Which one of the following is true if the managers of a firm accept only projects that have a profitability index greater than 1.5?

• A)The firm should increase in value each time it accepts a new project.
• B)The firm is most likely steadily losing value.
• C)The price of the firm's stock should remain constant.
• D)The net present value of each new project is zero.
• E)The internal rate of return on each new project is zero.