Without Using Formulas, Provide a Definition of Profitability Index (PI)

question 358

Multiple Choice

Without using formulas, provide a definition of profitability index (PI) .

• A) A ranking method used to assess projects. PI greater than 1 signify positive NPV projects, while PI less than 1 signify negative NPV projects.
• B) A project analysis tool that determines the amount of time required for an investment to generate cash flows to recover its initial cost.
• C) A project analysis tool that measures the acceptability of a project by determining the length of time required for an investment's discounted cash flows to equal its initial cost.
• D) A project analysis tool that measures the acceptability of a project through the difference between a project's initial investment and whether the present value of its cash flow will
• Repay the investment.
• E) A project analysis tool that measures the acceptability of a project by determining the amount of profit that can be expected based on an investment made.

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Definitions:

Points of Discussion

Specific topics or issues designated for conversation, debate, or consideration.

Decisions Made

Refers to the conclusions or resolutions reached after considering options in a decision-making process.

Tasks Assigned

Specific duties or responsibilities that are given to an individual or group to complete.

In-Person

Interaction or engagement that takes place physically, face-to-face, rather than through digital or remote means.