According to the Profitability Index Criterion, a Project Is Acceptable

question 30

Multiple Choice

According to the profitability index criterion, a project is acceptable if its profitability index is

• A)greater than 1 plus the cost of capital
• B)greater than 0
• C)greater than or equal to 1
• D)greater than 1.1

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Definitions:

Government Franchising

A process by which a government grants a company the exclusive right to operate, produce, or sell a service within a certain area.

Legal Barriers

Restrictions established by law or regulation that control how businesses operate, often to limit competition or protect consumers.

Short Run

In economics, a period in which at least one factor of production is fixed, allowing for limited adjustments to changes in demand or supply.

Long Run

A period in economics where all resources and inputs can be fully adjusted or changed, contrasting with the short run where some are fixed.