Based on the Profitability Index of _____ for This Project

question 97

Multiple Choice

Based on the profitability index of _____ for this project, you should _____ the project.

• A).97; accept
• B)1.05; accept
• C)1.18; accept
• D).97; reject
• E)1.05; reject

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Definitions:

Annual Interest

The amount of interest earned or paid over a one-year period on investments, loans, or savings.

Rule of 70

A formula used to estimate the number of years required for an investment or population to double, given a fixed annual growth rate.

Interest Rate

The sum charged by a lender, as a fraction of the principal, for the privilege of accessing assets by a borrower.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.