A profitability index greater than ________ means that a project has a positive NPV.

Question

Quizplus · Accepted Answer

A profitability index greater than one means that the present value of the future cash flows of the project is greater than the initial investment, which indicates a positive NPV (Net Present Value). A profitability index of less than one would mean that the project's future cash flows are not expected to exceed the initial investment, resulting in a negative NPV. Therefore, a profitability index greater than one is the best choice for indicating a positive NPV.

A Profitability Index Greater Than ________ Means That a Project