An Investment Is Acceptable If the Profitability Index (PI)of the Investment

question 80

Multiple Choice

An investment is acceptable if the profitability index (PI) of the investment is:

• A)less than one.
• B)greater than one.
• C)greater than the internal rate of return (IRR).
• D)less than the net present value (NPV).
• E)greater than a pre-specified rate of return.

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Definitions:

Trade Deficit

A state where the amount of goods and services brought into a country is higher than the amount sent out, leading to an adverse balance of trade.

Balance Of Trade

The difference in value between a country's exports and imports over a specific period, indicating the net earnings from international trade.

Goods

Physical items that are produced for sale and consumption to satisfy human wants, such as food, clothing, and cars.

Services

Intangible products such as healthcare, education, and banking, that provide value or meet needs without producing physical goods.