NC Products Inc

question 51

Multiple Choice

NC Products Inc. is considering investing in one of two projects. Both projects have a net present value of $25,000; however, Project #1 requires an initial investment of $300,000 while Project #2 requires an initial investment of $700,000. Based on this information, which of the following statements is true?

• A) Project #2 will have a higher profitability index.
• B) Project #1 will have a higher profitability index.
• C) Both projects will have the same profitability index.
• D) There is not enough information to determine the profitability index of either project.

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Definitions:

Grace Period

A set period after a payment due date during which a late fee or other penalty for late payment is waived.

Unsolicited Card

A credit or debit card sent to individuals without their request, which has been largely prohibited by certain regulations.

Stolen

Taken without permission or legal right and without intending to return it.

Deceptive Claim

A false or misleading statement made about a product or service, often used in advertising or sales to induce consumers to buy.