How Should a Profitability Index of Zero Be Interpreted

question 51

Multiple Choice

How should a profitability index of zero be interpreted?

• A)The present value of the cash flows subsequent to the initial cash flow is equal to (−1 × Initial cash flow).
• B)The project has an internal rate of return equal to the discount rate.
• C)The project produces a net income of zero for every year of its life.
• D)The project's cash flows subsequent to the initial cash flow have a present value of zero.
• E)The project also has a net present value of zero.

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Definitions:

Stereotypes

Oversimplified generalizations about a group of people that often lead to prejudiced attitudes and discrimination.

Secondary Labour Market

Part of the job market consisting of low-paying jobs with poor working conditions, limited job security, and few prospects for advancement.

Fringe Benefits

Additional benefits supplementing an employee's salary, such as health insurance, paid vacations, and retirement plans, which are not part of the direct wages.

Exploited Labour Market

A labor market segment characterized by unfair wages and working conditions, where workers are made to work for less than their labor is worth due to unequal power dynamics.