A Project Has an Initial Cost of $40,100 and Anticipated

question 67

Multiple Choice

A project has an initial cost of $40,100 and anticipated cash flows of $10,200,$21,700,$15,600,and $7,800 for Years 1 to 4,respectively.What is the profitability index value if the required return is 12.6 percent?

• A).92
• B)1.05
• C)0.99
• D)1.01
• E).96

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Definitions:

Buying Center

A group of individuals within an organization who are involved in the decision-making process for purchasing products or services.

Decision Maker

An individual or group responsible for making choices or judgments in the context of purchasing or strategic planning.

Modified Rebuy

Refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so forth.

Walmart Buyers

Professionals responsible for selecting and procuring goods for sale in Walmart, ensuring a match with consumer preferences and demand.