When Long-Term Investment Funds Are the Constraint and the Company

question 41

True/False

When long-term investment funds are the constraint and the company is choosing from among potential long-term projects, the profitability index should be computed by dividing the net present value of a project by the expected total revenues from the project.

---

Definitions:

Compliance

A change in behavior in response to a request.

Dissonance Theory

A theory proposed by Leon Festinger that suggests that inconsistency among beliefs or behaviors causes psychological discomfort (dissonance), leading to efforts to reduce the dissonance.

Innocence

symbolizes the state of being free from guilt or moral wrong, typically attributed to children or in legal contexts where an individual is found not guilty of a crime.

Compliance

The act of conforming, submitting, or adapting one's behavior to align with the demands or requests of others.