Webley Corp

question 60

Multiple Choice

Webley Corp. is considering two expansion options, but does not have enough capital to undertake both. Project W requires an investment of $100,000 and has an NPV of $10,000. Project D requires an investment of $80,000 and has an NPV of $8,200. If Webley uses the profitability index to decide, it would

• A) choose D because it has a higher profitability index.
• B) choose W because it has a higher profitability index.
• C) choose D because it has a lower profitability index.
• D) choose W because it has a lower profitability index.

---

Definitions:

Factor Analysis

A statistical method used to identify underlying variables, or factors, that explain the pattern of correlations within a set of observed variables.

Variance Assessment

The process of evaluating the extent of variation or dispersion from the mean or expected value in a set of data.

Standardization

The process of implementing and developing technical standards to ensure consistency and compatibility across different processes or products.

Crystallized Intelligence

The ability to use learned knowledge and experience, as opposed to the ability to think and solve problems in novel situations.