Use of a Profitability Index to Select Projects in the Absence

question 83

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:

Participants

Individuals who take part in a study and whose data is collected for analysis.

Tested Once

Refers to conducting a particular test or experiment only one time under a specific set of conditions or parameters.

Tested Twice

The act of conducting a test or evaluation on the same subject or group twice to compare results, check for consistency, or measure change.

Participants

Individuals who take part in a study or research, providing data for analysis.