Chapter 13: Capital Budgeting Techniques MCQs

Multiple-Choice Quiz

Chapter 13:   Capital Budgeting Techniques

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1. A profitability index of .85 for a project means that:

the present value of benefits is 85% greater than the project's costs.

the project's NPV is greater than zero.

the project returns 85 cents in present value for each current dollar invested.

the payback period is less than one year.