An Investment Is Acceptable If the Profitability Index (PI) of the Investment

question 374

Multiple Choice

An investment is acceptable if the profitability index (PI) of the investment is:

• A) Greater than one.
• B) Less than one.
• C) Greater than the internal rate of return (IRR).
• D) Less than the net present value (NPV).
• E) Greater than a pre-specified rate of return.

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Definitions:

Mowrer's Two-Factor Theory

A psychological theory that integrates classical and operant conditioning to explain avoidance learning and the development of phobias.

Escape Response

A behavioral response to an aversive event that is reinforced by the termination of the aversive event.

Punishment

The introduction of a consequence in response to a behavior with the intent to decrease the likelihood of that behavior occurring in the future.

Suppressive Influence

The impact or effect that reduces, inhibits, or diminishes a particular response, activity, or expression.