The Use of a Profitability Index Will Always Provide Results

question 111

Multiple Choice

The use of a profitability index will always provide results consistent with selecting the project with the:

• A) highest NPV.
• B) highest IRR.
• C) largest dollar invested per rate of return.
• D)largest return per dollar invested

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Definitions:

Applied Of Fechner's Law

The practical application of Fechner's principle, which relates the intensity of a physical stimulus to the intensity of the sensation it produces.

Weber Fraction

A psychological principle that quantifies the perception of change in a given stimulus proportionate to the original intensity of the stimulus.

Just-Noticeable Difference

The smallest difference in stimulus intensity that a specific sense can detect.

Decision Criterion

The threshold or standard set by an individual or system to decide between alternatives.