Based on the Profitability Index Rule,should a Project with the Following

question 44

Multiple Choice

Based on the profitability index rule,should a project with the following cash flows be accepted if the discount rate is 14 percent? Why or why not?

• A)Yes; The PI is 0.96.
• B)Yes; The PI is 0.80.
• C)Yes; The PI is 1.08.
• D)No; The PI is 0.96.
• E)No; The PI is 0.80.

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Definitions:

GDP

Gross Domestic Product; the total market value of all final goods and services produced within a country in a given period.

Gross Domestic Product

A measure of the economic performance of a country, calculating the total value of all goods and services produced within its borders in a specific period.

Inputs and Outputs

The resources used in the production process (inputs) and the goods or services produced (outputs).

Pieter Bruegel

A Flemish Renaissance painter known for his landscapes, religious subjects, and depictions of peasant life.