Profitability index in capital budgeting is used for_________?

Related Mcqs:

1. The 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. 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

5. If net present value is positive, then profitability index will be__________?

   A. Greater than two
   B. Equal to
   C. Less than one
   D. Greater than one

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. 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

10. In capital budgeting, positive net present value results in_________________?

    A. Negative economic value added
    B. Positive economic value added
    C. Zero economic value added
    D. Percent economic value added