Snaptile Company Evaluates Future Projects by Using the Profitability Index

question 33

Multiple Choice

Snaptile Company evaluates future projects by using the profitability index. The company is currently reviewing three projects similar in nature and must choose one of the following: $\begin{array} { l l l r } \text { Project } & \text { Initial Investment } && \begin{array} { l } \text { Present Value of Cash } \\\text { Inflows }\end{array} \\1 & \$ 400,000 && \$ 300,000 \\2 & 200,000 & & 320,000 \\3 & 350,000 & & 430,000\end{array}$ Which project should Snaptile select if the decision is based entirely on the profitability index?

• A)Project 1 with a profitability index of 0.75.
• B)Project 1 with a profitability index of 1.33.
• C)Project 2 with a profitability index of 1.60.
• D)Project 2 with a profitability index of 0.67.
• E)Project 3 with a profitability index of 0.81.

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Definitions:

Biocolonialism

The exploitation of biological resources of developing countries by Western pharmaceutical or biotechnological companies without fair compensation.

Patriarchal Society

A societal structure where men hold primary power and predominate in roles of political leadership, moral authority, social privilege, and control of property.

Human Exceptionalism Paradigm

The belief that humans are separate from and superior to nature and other animals, often used to justify anthropocentric views and policies.

Cultural Accumulation

describes the process through which a culture gathers and amasses knowledge, traditions, and artifacts over time.