When assessing three projects with profitability indexes of 1.05, 1.7 and 1.2, unless all projects have the same lives it is impossible to rank them accurately.

Name: When assessing three projects with profitability indexes of 1.05, 1.7 and 1.2, unless all projects have the same lives it is impossible to rank them accurately.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The profitability index does not take into account the time value of money, so it is not possible to rank projects with different lives accurately using this metric.

When Assessing Three Projects with Profitability Indexes of 1