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:

Schedule

A plan for carrying out a process or procedure, giving lists of intended events and times.

Routinely Late

A habitual pattern of being delayed or not arriving on time for appointments, work, or other scheduled activities.

Reprimand

To express to someone strong disapproval or criticism of their actions.

Inconsiderate

Describing behavior or actions that show a lack of concern for the needs, feelings, or well-being of others.