Using the Profitability Index Method, the Present Value of Cash

question 80

Multiple Choice

Using the profitability index method, the present value of cash inflows for Project Flower is $88,000 and the present value of cash inflows of Project Plant is $48,000. If Project Flower and Project Plant require initial investments of $90,000 and $40,000, respectively, and have the same useful life, the project that should be accepted is

• A) Project Flower.
• B) Project Plant.
• C) Either project may be accepted.
• D) Neither project should be accepted.

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Definitions:

Fertilizer Types

Different classifications of substances used to provide essential nutrients to plants, including organic, inorganic, chemical, and natural fertilizers.

Bermuda Grass

A type of durable, warm-season grass often used in warmer climates for lawns, sports fields, and golf courses due to its high tolerance to heat and drought.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect exists in a particular set of observations, usually serving as the default assumption in hypothesis testing.

Wire Types

Wire types refer to the various kinds of electrical wires and cables used in building wiring systems, each designed for specific applications, gauges, and insulation.