What Is the Profitability Index of a Project That Has

question 75

Multiple Choice

What is the profitability index of a project that has an initial cash outflow of $600, an inflow of $250 for the next 3 years and a cost of capital of 10 percent?

• A) 0.667
• B) 2.036
• C) 1.036
• D) 2.739

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Definitions:

Specification Limits

Predefined bounds within which a product, service, or outcome must fall to be considered acceptable quality.

Standard Errors

Measures of the statistical accuracy of an estimate, reflecting how much an estimated parameter varies under repeated sampling.

Process Distribution

The pattern of variation that a process exhibits, often characterized by a probability distribution that describes how process measurements are dispersed or spread.

S Chart

A type of control chart used for monitoring the variability of a process as measured by the sample standard deviation.