An Independent Investment Is Acceptable If the Profitability Index (PI)of

question 70

Multiple Choice

An independent investment is acceptable if the profitability index (PI) of the investment is:

• A)greater than 1.0.
• B)less than 1.0.
• C)greater than the internal rate of return.
• D)less than the internal rate of return.
• E)greater than a pre-specified rate of return.

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Definitions:

Income Statement

An Income Statement is a financial document that reports a company's revenues, expenses, and net income over a specific period of time.

Miscellaneous Expenses

Minor or incidental expenses that do not fit into the standard expense categories of a business's budget.

Unadjusted Trial Balance

A summary listing of the titles and balances of accounts in the ledger prior to the posting of adjusting entries.

Account Title

The name given to an account in the ledger to identify the type of transactions it records, such as "Sales Revenue" or "Accounts Payable."