The is interpreted as the for each dollar of initial investment.
A)net present value;present value return
B)profitability index;cash flow return
C)profitability index;present value return
D)none of these

Question

Quizplus · Accepted Answer

The term "Profitability Index" refers to the present value of future cash flows divided by the initial investment. Therefore, option C, "Profitability Index; present value return," is the best choice. Option A, "Net present value; present value return," is incorrect because NPV is an absolute dollar value, not a ratio. Option B, "Profitability Index; cash flow return," is incorrect because there is no such thing as a "cash flow return." Finally, option D, "none of these," is incorrect because one of the options is indeed correct.

The Is Interpreted as the for Each Dollar of Initial