A profitability index (PI) of .92 for a project means that . A. The project's costs (cash outlay) are (is) less than the present value of the project's benefits B. The project's NPV is greater than zero C. The project's NPV is greater than 1 D. The project returns 92 cents in present value for each current rupee invested (cost)

A profitability index (PI) of .92 for a project means that .

A. The project's costs (cash outlay) are (is) less than the present value of the project's

benefits

B. The project's NPV is greater than zero

C. The project's NPV is greater than 1

D. The project returns 92 cents in present value for each current rupee invested (cost)
by

1 Answer

Answer :

C. The project's NPV is greater than 1
by

Related questions

A project has a Profitability Index of 1.30. What does it mean? A.The NPV is less than zero B.The payback period is more than one year C.That the project returns Rs 1.30 for every Re 1 invested in the project D.That IRR is 1.30 times that of the Hurdle Rate

Description : A project has a Profitability Index of 1.30. What does it mean?  A.The NPV is less than zero B.The payback period is more than one year  C.That the project returns Rs 1.30 for every Re 1 invested in the project  D.That IRR is 1.30 times that of the Hurdle Rate

Last Answer : C.That the project returns Rs 1.30 for every Re 1 invested in the project

When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

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Last Answer : B. net present value (NPV)

When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

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Last Answer : B. net present value (NPV)

Which of the following statements is incorrect regarding a normal project? A. If the NPV of a project is greater than 0, then its PI will exceed 1. B. If the IRR of a project is 8%, its NPV, using a discount rate, k, greater than 8%, will be less than 0.C. If the PI of a project equals 0, then the project's initial cash outflow equals the PV of its cash flows. D. If the IRR of a project is greater than the discount rate, k, then its PI will be greater than 1.

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Last Answer : D. If the IRR of a project is greater than the discount rate, k, then its PI will be greater than 1.

A cost performance index (CPI) of 0.89 means: A. At this time, we expect the total project to cost 89 percent more than planned B. When the project is completed we will have spent 89 percent more than planned C. The project is only progressing at 89 percent of the rate planned D. The project is only getting 89 cents out of every dollar invested

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The criteria for acceptance of a project on the basis of Profitability Index (PI) is A.PI=0B. PI > 0 C. PI < 0 D. PI > 1

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A Firm is considering undertaking a project that would yield annual profits (after depreciation) of Rs 68,000 for 5 years. The initial outlay of the project would be Rs 800,000 and the project's assets would have a residual value of Rs 50,000 at the end of the project. What would be the accounting rate of return for this project? A 16% B 8.5% C 8.0% D 9.1%

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To the nearest rupee, what is the net present value of a replacement project whose cash flows are -Rs.104,000; Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 0 through 4, respectively? The firm has decided to assume that the appropriate cost of capital is 10% and the appropriate risk-free rate is 6%. A. Rs.15,115 B. Rs.26,798 C. Rs.33,346 D. Rs.48,121

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Which of the following is true regarding IRR?A. IRR assumes reinvestment at the cost of capital. B. IRR is the discount rate when NPV is greater than zero. C. IRR is a constrained optimization method. D. IRR is the discount rate when NPV is equal to zero.

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Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated

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Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.

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Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sigD. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculatedn changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money.

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A Project control system: 1. Monitors and controls the project's schedule, costs, scope, budgets etc 2. Is a mechanism which reacts to the current project status in order to endure accomplishment of project objectives 3. Is only needed on large mega projects 4. Is a system for controlling and executing project documentation in an uniform and timely manner

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