Which of the Following Is TRUE Regarding the Profitability Index

question 93

Multiple Choice

Which of the following is TRUE regarding the profitability index?

• A)It does not use the net present value (NPV)to assess benefits.
• B)It is very simple to compute.
• C)Attention must be taken when using it to make sure that all of the constrained resource is utilized.
• D)It is unreliable when used for choosing between different projects.
• E)It ignores cash flows after the cutoff