The major advantage provided by the profitability index is it:
A) eliminates the need to estimate the firm's cost of capital.
B) reduces the forecast error of cash flow estimates.
C) provides a better measure of the effects of a project on shareholder wealth than NPV.
D) is useful as an aid in raking projects from best to worst.
E) is easier to calculate than NPV.
D
You might also like to view...
The agreement in 2002 by the FASB and IASB to develop high quality, compatible accounting standards that could be used by both domestic and cross-border financial reporting was called the
A) International Accounting Standards agreement B) Financial Accounting Standards Board Global agreement C) Norwalk agreement D) United GAAP agreement
Accounting conventions and IRS rules sometime specify the depreciation parameters to be used
Indicate whether the statement is true or false
As organizations grow, they will tend towards bureaucracy. Such a prediction assumes organization design is contingent upon ______.
a. Technology b. Environment c. Size d. Throughputs
Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has. At the proper time she bids on the lamp and is the highest bidder. Even though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws the lamp from the auction. Can the auctioneer do that?
a. Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer. b. Generally, the auctioneer must sell to the highest bidder. Vivian will get the lamp. c. Generally, the auctioneer is the offeror and the bidders are the offerees so there is a contract and Vivian will get the lamp. d. Most auctions are without reserve and therefore the auctioneer cannot withdraw the lamp.