Which of the Following Statements Is FALSE

question 9

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:

Supreme Court

The highest federal court in the United States, consisting of nine justices and having jurisdiction over all other courts in the nation.

Judicial Restraint

A legal philosophy that courts should limit their power to making decisions that are strictly in accordance with the law and the Constitution, avoiding activism or extensive interpretation.

Majority Opinion

The official statement of the decision reached by the majority of judges or justices on an appellate court, including the legal reasoning behind the decision.

Court Position

A role within the judicial system, such as a judge or justice, responsible for interpreting and applying the law in legal cases.