Gordon Corporation Is Considering a 30 Year Project

question 27

Multiple Choice

Gordon Corporation is considering a 30 year project.The present value of all future cash flows from the project is $825,000.Its initial investment is $475,000.Calculate the Profitability Index on this project.

• A)0.74
• B)0.84
• C)1.14
• D)1.74

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Definitions:

Cognitive Consistency

The psychological concept that suggests that individuals prefer their beliefs, attitudes, and perceptions to be harmonious and consistent with each other.

Self-Perception

An individual's understanding and evaluation of their own personality, characteristics, and behaviors.

Positive Attitude

A mental disposition that reflects expectations of favorable outcomes or highlights positive aspects of a situation.

Level of Commitment

the extent to which an individual is dedicated to a course of action or organization.