Which of the Following Is True Regarding the Profitability Index

question 61

Multiple Choice

Which of the following is true regarding the profitability index?

• A) It does not use the net present value (NPV) to assess benefits.
• B) It is very simple to compute.
• C) Attention must be taken when using it to make sure that all of the constrained resource is utilized.
• D) It is unreliable when used for choosing between different projects.
• E) It ignores cash flows after the cutoff

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Definitions:

Functional Structure

An organizational framework where departments are divided based on their function or role within the company, such as marketing, finance, and human resources.

Geographic Divisionalized Structure

An organizational structure where operations are divided based on geographic regions, with each region operating semi-autonomously to serve its local market effectively.

Divisionalized Structures

An organizational form in which the company is divided into semi-autonomous units or divisions, each responsible for its own operations and profitability.

Network Structure

An organizational design where entities are connected less hierarchically and more through a flexible arrangement of nodes, facilitating information flow and collaboration.