The Relevant Discount Rate for the Following Set of Cash

question 58

Multiple Choice

The relevant discount rate for the following set of cash flows is 14 percent.What is the profitability index?

• A)0.89
• B)0.93
• C)0.99
• D)1.03
• E)1.07

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Definitions:

Fractional Horsepower Motors

Electric motors with a power rating less than one horsepower, commonly used in household appliances.

Manual Motor Starters

Manual motor starters are devices used to manually turn on or off electric motors, providing protection by allowing the controlled starting and stopping, as well as overload protection.

Stator Unit

The stationary part of an electric machine, such as a motor or generator, which works in conjunction with the rotor to induce motion or generate electricity.

Energizes

The act of supplying electrical power to a circuit or component, causing it to operate.