Determine the Project's NPV If the Profitability Index Is 1

question 110

Multiple Choice

Determine the project's NPV if the Profitability Index is 1.4; and the investment value is $500,000.

• A)$25,000
• B)$75,000
• C)$200,000
• D)$250,000

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Definitions:

Factory Overhead

The total of all indirect costs involved in manufacturing a product, including expenses such as utilities, maintenance, and salaries of indirect labor.

Indirect Costs

Expenses not directly tied to a specific product or service, such as overhead costs like utilities and rent.

Administrative Expenses

Costs related to the general management and administration of an organization such as salaries of senior executives, legal and professional fees.

Managerial Accounting

Managerial Accounting focuses on providing financial and non-financial information to an organization's management for decision-making, planning, and performance evaluation.