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:

Ambiguous

Something that is open to more than one interpretation, explanation, or meaning, not having a single clear definition.

Poorly Defined

Lacking clarity or preciseness in description or concept, making understanding or interpretation difficult.

Psychosocial Development

A concept in psychology that encompasses the social and psychological aspects of development throughout a human's life, often associated with Erik Erikson's stages of development.

Trust Versus Mistrust

Erickson's first stage of psychosocial development, emphasizing the importance of developing trust in caregivers during infancy.