How Is the Profitability Index Calculated

question 72

Multiple Choice

How is the profitability index calculated?

• A)The present value of the net cash flows minus the initial investment.
• B)The present value of the net cash flows /plus the initial investment.
• C)The present value of the net cash flows divided by the initial investment.
• D)The initial investment divided by the present value of the net cash flows.

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Definitions:

Impulse Control

The ability to resist or delay an impulse, drive, or temptation to act.

Rapid Eye Movement

A phase of sleep characterized by rapid movements of the eyes, low muscle tone, and the propensity to dream vividly.

Sigmund Freud

A neurologist from Austria who established psychoanalysis as a technique for addressing mental disorders through conversational therapy between a psychoanalyst and their patient.

Non-Rapid Eye Movement

A phase of sleep characterized by slower brain waves, decreased body movement, and the absence of rapid eye movements, contrasting with REM sleep.