If a Project Costing $80,000 Has a Profitability Index of 1.00

question 44

Multiple Choice

If a project costing $80,000 has a profitability index of 1.00 and the discount rate was 12%, then the present value of the net cash flows was

• A) $80,000.
• B) less than $80,000.
• C) greater than $80,000.
• D) undeterminable.

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Definitions:

Competition

The rivalry among businesses to attract customers, which can lead to improvements in products, services, and prices.

Efficiency

The optimal allocation of resources to maximize the production of goods and services.

Quota

A government-imposed trade restriction that limits the quantity or monetary value of goods that can be imported or exported during a specific time period.

Imports

Commodities or offerings sourced from outside the country and brought in for commercial sale or personal use.