Question

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

Posted under Financial Management and Financial Markets

Answer: (b).1.82

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. The profitability index in capital budgeting is used for

View solution

Q. Other factors held constant, the greater project liquidity is because of

View solution

Q. In calculation of internal rate of return, an assumption states that received cash flow from the project must

View solution

Q. In capital budgeting, the number of non-normal cash flows having internal rate of returns are

View solution

Q. An internal rate of return in capital budgeting can be modified to make it the representative of

View solution

Q. The situation in which the firm limits the expenditures on capital is classified as

View solution

Q. The initial cost is $5000 and the probability index is 3.2 then the present value of cash flows is

View solution

Q. A project which have one series of cash inflows and results in one or more cash outflows is classified as

View solution

Q. The present value of future cash flows is divided by an initial cost of the project to calculate

View solution

Q. If the net present value is positive then the profitability index will be

View solution

Q. The cash flows occurring with more than one change in sign of cash flow are classified as

View solution

Q. The first step in calculation of net present value is to find out

View solution

Q. The situation in which one project is accepted while rejecting an other project in comparison is classified as

View solution

Q. The sum of discounted cash flows is best defined as

View solution

Q. The life that maximizes net present value of an asset is classified as

View solution

Q. If two independent projects having hurdle rate then both projects should

View solution

Q. The cash outflows are the costs of project and are represented by

View solution

Q. In capital budgeting, two projects having cost of capital as 12% is classified as

View solution

Q. The cash flow which starts negative then positive then again positive cash flow is classified as

View solution

Q. In estimating value of cash flows, the compounded future value is classified as its

View solution
View All MCQs on Financial Management and Financial Markets

Recommended Subjects

Are you eager to expand your knowledge beyond Financial Management and Financial Markets? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

General Knowledge

Expand your horizons and stay informed about the world with our General Knowledge...

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

Marketing and Marketing Management

Uncover the strategies and tactics of marketing with our Marketing and Marketing...

Textile Engineering

Explore the dynamic world of Textile Engineering with our specialized category. Delve...

Mechanics of Materials

Unlock the principles of Mechanics of Materials with our specialized category. Dive...

Avionics Engineering

Soar into the world of aviation technology with our Avionics Engineering category....

IC22 Life Insurance Underwriting

Prepare for success in the Insurance Institute of India (III) examination with IC22...

Electronics and Communication Engineering

Explore the dynamic field of Electronics and Communication Engineering with our...

IC 89 Management Accounting

Boost your preparation for the IC 89 Management Accounting exam with our extensive...