Seth Morrison is considering alternative proposals that involve different amounts of investments.To compare different sizes of investment proposals,it may be helpful for Seth to prepare a relative ranking of the proposals by using a(n):

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Present value index (also known as profitability index) is a tool that helps in comparing projects by taking into account the present value of cash inflows and outflows. It is preferred over net present value and internal rate of return when comparing proposals with different investment amounts because it considers the size of the proposal and provides a ratio of the present value of expected cash inflows to the present value of expected cash outflows for each proposal. This allows for a comparison of the relative profitability of each proposal, regardless of their differing investment amounts.

Seth Morrison Is Considering Alternative Proposals That Involve Different Amounts