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The Major Advantage Provided by the Profitability Index Is It

Question 68

Multiple Choice

The major advantage provided by the profitability index is it:


A) eliminates the need to estimate the firm's cost of capital.
B) reduces the forecast error of cash flow estimates.
C) provides a better measure of the effects of a project on shareholder wealth than NPV.
D) is useful as an aid in raking projects from best to worst.
E) is easier to calculate than NPV.

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