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:

Compacted Plant Remains

Organic matter that has been compressed over time into solid formations, often contributing to the formation of coal and other fossil fuels.

Limestone

A sedimentary rock composed mainly of calcium carbonate, commonly used in construction and as a raw material in manufacturing.

Marble

A metamorphic rock formed from limestone, known for its use in sculpture and architecture due to its beauty and durability.

Water Contamination

The presence of harmful substances in water, which can degrade water quality and pose health risks to humans, animals, and ecosystems.