The Profitability Index Is the Ratio Of

question 104

Multiple Choice

The profitability index is the ratio of:

• A)average net income to average investment.
• B)present value of cash flows to initial investment cost.
• C)net present value of cash flows to internal rate of return.
• D)net present value of cash flows to average accounting return.
• E)internal rate of return to current market interest rate.

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Definitions:

Personal Orientation

An individual's characteristic approach to life, encompassing attitudes, values, and beliefs that influence behavior and interactions with others.

Sensation-Type

A psychological characteristic indicating a preference for sensory experience and concrete information.

Intuitive-Type

Characterizes individuals or decision-making styles that rely more on instinctual feelings rather than systematic analysis.

Big Picture

An overall perspective or comprehensive understanding of a situation, concept, or project, focusing on its entirety rather than minute details.