What Would a Project's Profitability Index Be If the Project

question 85

Multiple Choice

What would a project's profitability index be if the project has an internal rate of return which is equal to the company's discount rate?

• A)It would be 0.5.
• B)It would be 0.0.
• C)It would be 1.0.
• D)It cannot be determined from information provided

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Definitions:

Worksheet

A paper or electronic document used to organize and simplify complex information, often used in accounting and financial analysis.

Income Statement Columns

Sections in an income statement that categorize financial data such as revenues, expenses, and net income over a specific period.

Net Loss

The amount by which expenses exceed revenues for a specific period, indicating a decrease in the owner's equity.

Straight-Line Depreciation

A method of calculating the depreciation of an asset by evenly spreading its cost over the expected useful life.