________ is a modification of NPV to produce the ratio of the present value of the benefits (future cash inflow)to the present value of the costs (initial investment).
A)Modified Internal Rate of Return Method
B)Profitability Index (PI)
C)Payback Period Method
D)Discounted Cash Flow Method

Question

Quizplus · Accepted Answer

The definition given in the question is that of Profitability Index (PI), therefore the answer is B. Modified Internal Rate of Return (MIRR) and Payback Period Method are different methods of capital budgeting analysis, and Discounted Cash Flow Method is a broader category that includes NPV and PI as specific methods.

________ Is a Modification of NPV to Produce the Ratio