Use the table for the question(s)below.
Consider the following list of projects:

-Assuming that your capital is constrained, which investment tool should you use to determine the correct investment decisions?
A)internal rate of return (IR
B)net present value (NP
C)profitability index
D)incremental IRR

Question

Use the table for the question(s)below.
Consider the following list of projects:
 
-Assuming that your capital is constrained, which investment tool should you use to determine the correct investment decisions?
A)internal rate of return (IR
B)net present value (NP
C)profitability index 
D)incremental IRR

Quizplus · Accepted Answer

The profitability index is the most suitable tool for determining correct investment decisions when capital is constrained. It measures the relative profitability of an investment, allowing investors to compare and prioritize projects based on the amount of value created per unit of investment.

Use the Table for the Question(s)below