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:

Rebellion

An act of resistance or defiance against established authority or conventional norms, often seen during adolescence.

Delinquency

Illegal or antisocial behaviors typically committed by minors, ranging from minor infringements to serious crimes.

Long-term Prospects

Future opportunities or potential, typically considered over an extended period, suggesting stability or growth.

Delinquent Adolescents

Young individuals, typically in their teenage years, who engage in illegal or antisocial behaviors.