What Is the Profitability Index for a Project Costing $40,000

question 86

Multiple Choice

What is the profitability index for a project costing $40,000 and returning $15,000 annually for 4 years at an opportunity cost of capital of 12%?

• A) 0.139
• B) 0.320
• C) 0.500
• D) 0.861

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Definitions:

Employer's Cost

Refers to the expenses borne by an employer in the course of business, including wages, benefits, training, equipment, and other costs related to employing and maintaining a workforce.

Union's Demands

Specific requirements or conditions that a labor union seeks to achieve through negotiation with employers.

Strike Activity

The organized refusal of workers to perform their job duties, typically to protest for better wages, working conditions, or other labor issues.

Legality/Illegality

Pertains to whether something is lawful and permitted or unlawful and forbidden under legal statutes.