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

Related Mcqs:

1. Profitability index in capital budgeting is used for_________?

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

2. 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

3. 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

4. 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

5. The profitability index in capital budgeting is used for __________?

   A. negative projects
   B. relative projects
   C. evaluate projects
   D. earned projects

6. 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

7. 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

8. 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

9. Rule of 72 as a short cut method is explained by the formula:

   A. 72 divided by the annual interest rate
   B. Annual interest rate dividend by 72
   C. 72 divided by (annual interest rate multiplied by discount factor)
   D. None of these

10. An effect of interest rate risk and investment risk on a bond’s yield is classified as_________?

    A. Reinvestment premium
    B. Investment risk premium
    C. Maturity risk premium
    D. Defaulter’s premium