What Is the Profitability Index for an Investment with the Following

question 2

Multiple Choice

What is the profitability index for an investment with the following cash flows given a 9% required return? $$\begin{array} { c c } \underline{\text { Year }} &\underline{ \text { Cash Flow }} \\ 0 & - \$ 21,500 \\1 & \$ 7,400 \\2 & \$ 9,800 \\3 & \$ 8,900\end{array}$$

• A).96
• B).98
• C)1.00
• D)1.02
• E)1.04

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Definitions:

Human Perception

The process by which humans interpret and make sense of sensory information from the environment.

Gains the Ability to See

The development or restoration of the capacity for vision or sight.

Lightness Constancy

The visual perception phenomenon whereby the perceived color or brightness of objects remains constant despite changes in illumination.

Relative Luminance

The brightness of an object compared to the brightness of a similarly illuminated object that appears to be white or highly reflective.