The Management of Hibert Corporation Is Considering Three Investment Projects-W

question 396

Multiple Choice

The management of Hibert Corporation is considering three investment projects-W, X, and Y. Project W would require an investment of $21,000, Project X of $66,000, and Project Y of $95,000. The present value of the cash inflows would be $22,470 for Project W, $73,920 for Project X, and $98,800 for Project Y. (Ignore income taxes.) The profitability index of investment project X is closest to:

• A) 0.11
• B) 0.88
• C) 1.12
• D) 0.12

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Definitions:

Operant Conditioning

A teaching mechanism in which the intensity of an action is altered through positive reinforcement or disciplinary actions.

Expectancy

The anticipation or belief about what will happen in the future, often based on past experiences or current evidence.

Judgement Creditor

An individual or entity that has won a monetary judgement against a debtor in court, granting them the right to collect the judgment amount from the debtor.

RUPA

The Revised Uniform Partnership Act, which is a legal guideline for the formation and conduct of partnerships in the United States.