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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Definitions:

Independence

The state of being self-reliant and not subject to control by others, often associated with the ability to make decisions and act on one's own.

Generativity

A stage of psychosocial development where individuals focus on guiding and nurturing the next generation, often by parenting or mentoring.

Ego Integrity

In Erikson's stages of psychosocial development, ego integrity is the final stage where the individual comes to terms with their life, leading to a sense of fulfillment and completion.

Psychosocial Development

A theory proposed by Erik Erikson that human development is influenced by a series of conflicts that are social in nature and span the person's lifetime.