Under conditions of limited resources,when a company is comparing several investments with different amounts of initial cost,the decision should be made on the basis of the ________.
A) highest total cash inflows
B) shortest payback period
C) highest profitability index
D) highest NPV

Question

Quizplus · Accepted Answer

The profitability index is the best criterion under conditions of limited resources because it provides a relative measure of profitability per unit of investment, allowing for a more efficient allocation of resources among different projects.

Under Conditions of Limited Resources,when a Company Is Comparing Several