Information on Four Investment Proposals Is Given Below

question 67

Multiple Choice

Information on four investment proposals is given below:
Rank the proposals in terms of preference according to the project profitability index:

• A) 3, 4, 1, 2
• B) 1, 2, 3, 4
• C) 1, 3, 2, 4
• D) 2, 1, 4, 3

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Definitions:

Consolidated Financial Statements

Financial statements that combine the accounts of the parent company with those of its subsidiaries, presenting the financial position and results of operations of the group as a single entity.

Subsidiary's Share Capital

The amount of money that a subsidiary has received from shareholders in exchange for shares of stock.

Non-Controlling Interest (NCI)

A portion of the equity in a subsidiary not owned by the parent company, representing the minority shareholders' interest in the company's net assets.

Historical Cost Principle

An accounting principle stating that assets should be recorded and reported at their original purchase price.