The profitability index (PI) rule can be best stated as:
A) An investment is acceptable if its PI is greater than one.
B) An investment is acceptable if its PI is less than one.
C) An investment is acceptable if its PI is greater than the internal rate of return (IRR) .
D) An investment is acceptable if its PI is less than the net present value (NPV) .
E) An investment is acceptable if its PI is less than its payback.
Correct Answer:
Verified
Q219: A firm seeks to accept projects with
Q220: Sal is considering a project that costs
Q221: An investment's average net income divided by
Q222: The average accounting return (AAR) rule can
Q223: Ginny Trueblood is considering an investment which
Q225: Capital budgeting decisions generally:
A) Have long-term effects
Q226: The net present value (NPV) rule can
Q227: The internal rate of return (IRR) rule
Q228: Shawn's Health Care is considering a project
Q229: Which one of the following methods of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents