Please Refer to the Following Data Concerning 4 Investment Alternatives

question 95

Multiple Choice

Please refer to the following data concerning 4 investment alternatives: What is the profitability index for Project A?

• A)0.98
• B)1.08
• C)1.36
• D)1.66

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Definitions:

Cash Flowing

The movement of money in and out of a business, representing its operational liquidity.

Expenses

Costs incurred during the operation of a business that are necessary for generating revenue, such as rent, salaries, utilities, and materials.

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Useful Life

The estimated lifespan of a depreciable asset during which it can be expected to contribute to company operations.