Profitability Index of a Project is the ratio of present value of cash inflows to :
The Profitability Index (PI), also known as the benefit-cost ratio of a project, is calculated as the ratio of the Present Value of future cash inflows to the Present Value…
Choose your answer
Profitability Index of a Project is the ratio of present value of cash inflows to :
Answer and explanation
Correct answer C
The Profitability Index (PI), also known as the benefit-cost ratio of a project, is calculated as the ratio of the Present Value of future cash inflows to the Present Value of cash outflows. A project is financially acceptable under this criterion when its Profitability Index exceeds 1.0.
Practice for these exams
-
UGC NET Commerce