Use of a Profitability Index to Select Projects in the Absence

question 79

Multiple Choice

Use of a profitability index to select projects in the absence of capital rationing:

• A)Will provide the same rankings as an NPV criterion
• B)Will maximize NPV, but not IRR
• C)Can result in misguided selections
• D)is technically impossible

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Definitions:

Associative Learning

The process by which an association between two stimuli or a behavior and a stimulus is learned.

Hypothesis Testing

A method of statistical inference used to decide whether a data set provides significant evidence against a given hypothesis.

Cognition

refers to the mental processes involved in acquiring knowledge and understanding through thought, experience, and the senses.

Learned Helplessness

A condition in which an individual learns to feel powerless and stops trying to change their situation, often a result of repeated failures or lack of control.