In the Absence of Capital Rationing, the Net Present Value

question 57

Multiple Choice

In the absence of capital rationing, the net present value method is normally superior to the ____ method when choosing among mutually exclusive investments.
I. internal rate of return
II. profitability index

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Neither statement I nor II is correct.

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Definitions:

Dollars

The unit of currency used in the United States and other countries, often symbolized by $.

Internal Rewards

Personal satisfaction and intrinsic motivations that come from within an individual, rather than external rewards.

Sense of Achievement

A feeling of pride and satisfaction that comes from accomplishing a task or reaching a goal.

Pride in Accomplishment

is a feeling of satisfaction and self-respect that comes from achieving or excelling in something.