The profitability index in capital budgeting is used for __________?

Related Mcqs:

1. Profitability index in capital budgeting is used for_________?

   A. Negative projects
   B. Relative projects
   C. Evaluate projects
   D. Earned projects

2. Profitability index (PI) rule is to take an investment, if the index exceeds___________?

   A. -1
   B. 0
   C. 1
   D. 2

3. In capital budgeting, two projects having cost of capital as 12% is classified as __________?

   A. hurdle rate
   B. capital rate
   C. return rate
   D. budgeting rate

4. The net present value, profitability index, payback and discounted payback are the methods to __________?

   A. evaluate cash flow
   B. evaluate projects
   C. evaluate budgeting
   D. evaluate equity

5. Net present value, profitability index, payback and discounted payback are methods to______________?

   A. Evaluate cash flow
   B. Evaluate projects
   C. Evaluate budgeting
   D. Evaluate equity

6. The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be ___________?

   A. 0.55
   B. 1.82
   C. 0.55
   D. 0.0182

7. If the net present value is positive then the profitability index will be ___________?

   A. greater than two
   B. equal to
   C. less than one
   D. greater than one

8. The present value of future cash flows is $4150 and an initial cost is $1300 then the profitability index will be ____________?

   A. 0.0319
   B. 3.19
   C. 0.31 times
   D. 5450

9. In capital budgeting, an internal rate of return of the project is classified as its __________?

   A. external rate of return
   B. internal rate of return
   C. positive rate of return
   D. negative rate of return

10. In capital budgeting, the term of bond which has great sensitivity to interest rates is __________?

    A. long-term bonds
    B. short-term bonds
    C. internal term bonds
    D. external term bonds