Which of the Statements Below Is TRUE

question 86

Multiple Choice

Which of the statements below is TRUE?

• A)According to the profitability index (PI)decision criterion when the PI is greater than 1,the costs exceed the benefits.
• B)If we realize that NPV is the present value of the benefits minus the present value of the costs,then we simply need to subtract the costs from the NPV to get the present value of the benefits.
• C)There are two acceptable projects,but we can only take one due to a shortage of funds.The PI for these two projects are: Project A: 2.25; Project B: 1.89.We would take Project B.
• D)A PI of 1.50 can be interpreted as meaning that for every $1.00 invested today the firm gets back $1.50 in current dollars.

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Definitions:

Legitimate

Conforming to established rules or standards, thereby being officially recognized as valid or lawful.

Organizational Teams

Groups of individuals within an organization who are brought together to achieve a common goal or complete specific tasks.

Competitive Advantage

A unique position that a company gains over its competitors, allowing it to generate greater sales or margins and/or retain more customers.

Workload Distribution

The process of evenly assigning tasks and responsibilities among team members to ensure efficient task completion.