If a Company Has Computed the Project Profitability Index of an Investment

question 61

Multiple Choice

If a company has computed the project profitability index of an investment project as 0.15,then:

• A)the project's internal rate of return is less than the discount rate.
• B)the project's internal rate of return is greater than the discount rate.
• C)the project's internal rate of return is equal to the discount rate.
• D)the relation between the rate of return and the discount rate is impossible to determine from the given data.

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