Which of the following can be used to place capital investment proposals involving different amounts of investment on a comparable basis for purposes of net present value analysis?

Question

Quizplus · Accepted Answer

The present value index (PVI) is a ratio of the present value of the anticipated net cash inflows from a capital investment proposal to the amount of the initial investment in the project. It is useful for placing investment proposals involving different amounts of investment on a comparable basis for purposes of net present value analysis. Choice A (price-level index) is a measure of the general price level of goods and services in an economy over time. Choice B (present value factor) is a factor used in calculating the present value of a future cash flow. Choice C (annuity) is a series of equal payments made at fixed intervals over a specified period.

Which of the Following Can Be Used to Place Capital