Wrikeman Evaluates Future Projects by Using the Profitability Index Which Project Should Wrikeman Select If the Decision Is Based

question 97

Multiple Choice

Wrikeman evaluates future projects by using the profitability index. The company is currently reviewing five similar projects and must choose one of the following: $$\begin{array} { c c c } \text { Project } & \begin{array} { c } \text { Initial } \\\text { Investment }\end{array} & \begin{array} { c } \text { Present Value } \\\text { of Cash Inflows }\end{array} \\1 & \$ 100,000 & \$ 97,000 \\2 & 50,000 & 80,000 \\3 & 75,000 & 110,000 \\4 & 60,000 & 100,000 \\5 & 150,000 & 200,000\end{array}$$ Which project should Wrikeman select if the decision is based entirely on the profitability index?

• A) Project 1.
• B) Project 2.
• C) Project 3.
• D) Project 4.
• E) Project 5.

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Definitions:

Carrying Capacity

The maximum population size of a species that an environment can sustain indefinitely, given the food, habitat, water, and other resources available.

Population Size

The total number of individuals within a defined area at a specific time, vital for understanding species survival and ecosystem balance.

Survivorship Curve

A graph showing the number or proportion of individuals surviving to each age for a given species or group.

Maturity

The state of being fully grown or developed, either biologically in organisms or in a metaphorical sense referring to emotional or intellectual development.