The Profitability Index Is Computed by Dividing the

question 125

Multiple Choice

The profitability index is computed by dividing the

• A) total cash flows by the initial investment.
• B) present value of cash flows by the initial investment.
• C) initial investment by the total cash flows.
• D) initial investment by the present value of cash flows.

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Definitions:

Adjectives

Words that describe or modify another person or thing in the sentence, often used to convey characteristics or qualities.

Effortful Processing

A type of information processing that requires conscious effort and attention, as opposed to automatic processing which requires little to no conscious effort.

Long-Term Retention

The ability to maintain and recall information over extended periods of time, beyond short-term memory.

Working Memory

A cognitive system that holds and processes limited amounts of information in mind in an active, easily accessible state for short periods.