Select the Incorrect Statement Concerning the Present Value Index (PVI)

question 61

Multiple Choice

Select the incorrect statement concerning the present value index (PVI) .

• A) The PVI is computed by dividing the total present value of the cash inflows by the present value of the cash outflows.
• B) The PVI should be used to evaluate two or more projects whose initial investments differ.
• C) The lower the PVI, the better.
• D) A project whose PVI is positive will also have a positive net present value.

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