A. -1
B. 0
C. 1
D. 2
Related Mcqs:
- Profitability index in capital budgeting is used for_________?
A. Negative projects
B. Relative projects
C. Evaluate projects
D. Earned projects - 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 - 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 - 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 - The profitability index in capital budgeting is used for __________?
A. negative projects
B. relative projects
C. evaluate projects
D. earned projects - 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 - 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 - 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 - 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 - 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
The correct answer to the question: "Profitability index (PI) rule is to take an investment, if the index exceeds___________?" is "1".
