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:

Economic Integration

A process whereby countries reduce trade barriers and coordinate monetary and fiscal policies to create a seamless economic region or market.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, often resulting in increased connectivity and interdependence among global economies.

Financialization

The increasing influence of financial markets, financial motives, financial institutions, and financial elites on the economy and economic policy.

Political Systems

The framework of formal legal institutions that constitute a government or a state, determining how power is acquired, communicated, and exercised.