Which of the Following Is FALSE About the Profitability Index

question 58

Multiple Choice

Which of the following is FALSE about the profitability index?

• A)It is an absolute measure of wealth.
• B)It is often used when firms are capital constrained.
• C)It produces the same accept/reject decisions as does the NPV.
• D)It works even when future cash flows change signs.

---

Definitions:

Government Imposes

Refers to actions or regulations that a government puts into place regarding economic or social policies.

Shrimp Market

An economic market specifically for the trading and selling of shrimp, influenced by factors like supply, demand, seasonality, and aquaculture developments.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity.

Consumers

Individuals or households that purchase goods and services for personal use.