Project a Has a Profitability Index of 0

question 44

Multiple Choice

Project A has a profitability index of 0.85. Project B has a profitability index of 1.24. The two projects are independent. Which of the following statements is (are) true?

• A)Only Project B should be accepted since it is the only one of the two projects that will maximize value.
• B)Both projects should be accepted since they are independent and each one has a profitability index greater than zero.
• C)Both Project A and Project B will have net present values that are greater than zero.
• D)Both A and C are true statements.

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Definitions:

Fixed-Interval

A schedule of reinforcement where a response is rewarded only after a specified amount of time has elapsed.

Reinforcement

The process of encouraging or establishing a pattern of behavior by offering rewards or consequences.

Employer

An entity or individual that hires and pays individuals for their labor or services.

Continuous-Reinforcement

A learning schedule in which every occurrence of the desired behavior is reinforced, thereby facilitating the acquisition of the desired behavior.