What Is the Profitability Index for an Acceptable Capital Budgeting

question 5

Multiple Choice

What is the profitability index for an acceptable capital budgeting project?

• A)greater than 1.0
• B)less than 1.0
• C)greater than 0.0
• D)less than 0.0

Differentiate between financial and real assets, the nature of bonds, and the concept of debt relationships.

Identify stakeholders and address the agency problem in corporate governance.

Recognize unethical financial behaviors and their implications on stakeholders and society.

Determine the equation of a line given a point and slope.

---

Definitions:

Treasury Stock

Equity that was once distributed to the public and later purchased again by the issuer, diminishing the total shares in circulation.

Paid-in Capital

Refers to the funds raised by a company through the sale of its shares to investors, representing the capital that shareholders have invested directly into the company.

Treasury Stock

Refers to shares that were once part of the outstanding shares but were bought back by the company and are now held in the company's treasury.

Par Value

A nominal value assigned to a share of stock by the company's corporate charter, unrelated to the market value.