Which of the Following Best Describes the Profitability Index

question 39

Multiple Choice

Which of the following best describes the profitability index?

• A) the ratio of present value of net cash inflows to initial investment
• B) an array of possible investment outcomes at different discount rates
• C) an index of projects based on their net profit
• D) the ratio of total cash inflows to initial investment

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Definitions:

Increased

A term that signifies a rise in quantity or quality, often used in financial and statistical contexts.

Reduced

A term often used to describe a decrease or diminution in size, quantity, or intensity.

35%

A percentage representing thirty-five parts out of a hundred.

Euro

The recognized monetary unit of the eurozone, utilized by 19 out of the 27 member states of the European Union.