The Profitability Index Will Be

question 169

Multiple Choice

The profitability index will be:

• A) Greater than 1.0 whenever the net present value is negative.
• B) Negative any time the net present value is negative.
• C) Less than 1.0 any time the discount rate is less than the IRR.
• D) Equal to 1 any time the IRR is less than the discount rate.
• E) Greater than 1.0 when the IRR is greater than the discount rate.

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