A Profitability Index Can Be Used to Rank Investment Proposals

question 40

Essay

A profitability index can be used to rank investment proposals.
Required:
A. Define the profitability index.
B. Two projects are under consideration. Project I has a net present value of $20,000 whereas project II has a net present value of $200,000. Which project is better? Explain. What weakness in a net-present-value analysis does the profitability index address?

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Definitions:

Client Surrogates

Individuals who are used in place of actual clients in research or training scenarios, often to simulate real-life situations or client interactions.

Online Survey Designs

Strategies for creating and implementing surveys that are distributed and completed over the internet, considering factors like engagement and response rate.

Placebo Groups

Groups in experimental research that receive a treatment with no active therapeutic effect, used as a control to measure the impact of the actual treatment.

Waiting-list Control

A group in experimental research that does not receive the intervention during the study but is promised to receive it once the study is completed, used to control for placebo effects.