(Ignore Income Taxes in This Problem

question 56

Multiple Choice

(Ignore income taxes in this problem. ) The management of Dewitz Corporation is considering a project that would require an initial investment of $65,000.No other cash outflows would be required.The present value of the cash inflows would be $72,800.The profitability index of the project is closest to:

• A)0.12
• B)1.12
• C)0.88
• D)0.11

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Definitions:

Discrete Random Variable

A type of random variable that can take on a countable number of distinct and separate values.

Weighted Average

An average that attributes different weights to elements in the dataset, reflecting their varying levels of importance or frequency.

Expected Value

The long-run average value of repetitions of the experiment it represents, in probability and statistics.

Random Variable

A quantity whose numerical values emerge from unpredictable phenomena.