Projects are accepted under profitability method, if A)PI 1 B)PI = 1 C)PI

Name: Projects are accepted under profitability method, if A)PI > 1 B)PI = 1 C)PI < 1 D)PI = 0
Brand: Quizplus
Rating: 4.9 (44 reviews)

Question

Projects are accepted under profitability method, if
A)PI > 1
B)PI = 1
C)PI < 1
D)PI = 0

Quizplus · Accepted Answer

The Profitability Index (PI) is a measure used to evaluate the attractiveness of an investment or project. If PI > 1, it means that the present value of future cash flows is greater than the initial investment, indicating that the project is expected to generate more value than it costs, hence it is accepted.

Projects Are Accepted Under Profitability Method, If