You were recently hired by a firm as a project analyst.The owner of the firm is unfamiliar with financial analysis and wants to know only what the expected dollar return is per dollar spent on a given project.Which financial method of analysis will provide the information that the owner requests?
A)Internal rate of return
B)Modified internal rate of return
C)Net present value
D)Profitability index
E)Payback

Question

Quizplus · Accepted Answer

The profitability index provides the expected dollar return per dollar spent, as it is calculated by dividing the present value of future cash flows by the initial investment.

You Were Recently Hired by a Firm as a Project