Vess IncIs Considering the Following Two Projects Which of the Following Statements Is True When Comparing Each

question 38

Multiple Choice

Vess Inc.is considering the following two projects:
$\begin{array}{rr}&\text { Project \#1 } & \text { Project \#2 } \\\hline \text { Initial investment }&\$ 20000 & \$ 60000 \\\text { PV of cash inflows }&26000 &66000\end{array}$

Which of the following statements is true when comparing each of these projects?

• A) Project #1 has a higher profitability index.
• B) Project #2 has a higher net present value.
• C) They both have the same profitability index.
• D) They both have an unacceptable profitability index.

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Definitions:

Accommodation

The process of adjusting or adapting cognitive schemas to integrate new information, or physical provisions made for housing.

Organization

The structured arrangement of components, applicable to entities ranging from businesses to biological systems, to achieve specific goals or functions.

Assimilation

The cognitive process in which new information is absorbed and integrated into pre-existing knowledge structures and frameworks.

Sensorimotor Stage

The first of Piaget's stages of cognitive development, spanning from birth to about 2 years, where infants learn about the world primarily through sensory experiences and manipulating objects.