A Firm Uses the Profitability Index to Select Between Two

question 89

Multiple Choice

A firm uses the profitability index to select between two mutually exclusive investments.If no capital rationing has been imposed,which project should be selected?

• A) Select the project with the higher profitability index.
• B) Select the project with the lower profitability index.
• C) Without capital rationing, both projects can be selected.
• D)Without capital rationing, select by NPV method.

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