Select the Incorrect Statement Concerning the Present Value Index (PVI)

question 61

Multiple Choice

Select the incorrect statement concerning the present value index (PVI) .

• A) The PVI is computed by dividing the total present value of the cash inflows by the present value of the cash outflows.
• B) The PVI should be used to evaluate two or more projects whose initial investments differ.
• C) The lower the PVI, the better.
• D) A project whose PVI is positive will also have a positive net present value.

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Definitions:

Embargo Act

Attempt in 1807 to exert economic pressure by prohibiting all exports from the United States, instead of waging war in reaction to continued British impressment of American sailors; smugglers easily circumvented the embargo, and it was repealed two years later.

Sedition Act

Refers to several historical laws in the United States that made it illegal to speak or act against the government, notably the 1918 act during World War I.

Republican Press

The segment of the media historically aligned with or supportive of the Republican Party and its policies in the United States.

Alexander Hamilton

A Founding Father of the United States, first Secretary of the Treasury, and key figure in the establishment of the national financial system.