Which of the Following Is True Regarding the Profitability Index

question 49

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.

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Definitions:

Demand Curve

An illustration depicting the connection between a good's price and the volume of the good consumers can and are ready to acquire at assorted prices.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean which has numerous uses, including oil and protein sources.

Mad Cow Disease

A fatal brain disease in cattle that can potentially be transmitted to humans who consume tainted beef, scientifically known as Bovine Spongiform Encephalopathy (BSE).

Competitive Market

A market structure where there are many buyers and sellers, no single entity controls the prices, and there is freedom of entry and exit.