Which of the Following Statements Is False

question 83

Multiple Choice

Which of the following statements is false?

• A) If there is a fixed supply of resource available, you should rank projects by the profitability index, selecting the project with the lowest profitability index first and working your way down the list until the resource is consumed.
• B) Practitioners often use the profitability index to identify the optimal combination of projects when there is a fixed supply of resources.
• C) If there is a fixed supply of resources available, so that you cannot undertake all possible opportunities, then simply picking the highest NPV opportunity might not lead to the best decision.
• D) The profitability index is calculated as the NPV divided by the resources consumed by the project.

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Definitions:

Solicited Proposals

Requests for proposals that are made in response to an explicit demand or invitation from an organization or individual.

Indirect Method

A communication approach that presents the main point after providing the background or reasoning, often used to soften the delivery of sensitive information.

Internal Proposal

A document or request aimed at addressing issues or suggesting improvements within an organization by its members.

External Agency

An outside organization or group that provides specific services or functions separate from the hiring company.