The profitability index is a scale less attribute for measuring a projects benefits relative to the costs.

Question:

The profitability index is a scale less attribute for measuring a project’s benefits relative to the costs. How might this help to eliminate bias in project selection?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

See More Books

Question Posted: Jun 12, 2012 12:50 AM

See More Questions

The profitability index is a tool for measuring a projects benefits relative to its costs. How might this help to eliminate bias in project selection?
Briefly explain how the profitability index is calculated and interpreted.
How is the project profitability index computed, and what does it measure?
KEA10. LO 16.3 Use the following excerpts from Fruitcake Company's financial records to determine net cash flows from investing activities. Acquired new plant assets Collected interest on investment...
Gulf States Manufacturing has the following data from year 1 operations, which are to be used for developing year 2 budget estimates: All depreciation charges are fixed. Old manufacturing equipment...
The chilling room of a meat plant is 15 m 18 m 5.5 m in size and has a capacity of 350 beef carcasses. The power consumed by the fans and the lights in the chilling room are 22 and 2 kW,...
Suppose that we want to estimate what percentage of all bearings wears out due to friction within a year of installation. How large a sample will we need to be at least $90 \%$ confident that the...
Ethical Issue: Discuss the ethics of the indirect pattern of organization. Is it manipulative to delay the presentation of the main idea in a message?
Dexter Technology maintains its records using cash-basis accounting. Consider the following: . During the year, the company received cash from customers, $35,000, and paid cash for salaries, $21,000....
Jewels Hair Design Studios would like to purchase another hair salon that is being sold in a neighboring town for $ 500,000. Assume cash flows occur at the end of the year. Based on past volume of...
High Tech Monopoly Co. has plenty of cash to fund any conceivable positive NPV project. Can you describe a situation in which capital rationing could still occur?
Define variable costs and fixed costs, and give an example of each.
Determine whether the series converges or diverges. 4"+1 3" 2 -1
Contribution can be sought a. only when defendants are jointly liable. b. can be sought from a defendant who has a valid defense. c. can be sought from an employer if workers compensation statutes...
True Or False The doctrine of equitable indemnity provides that the indemnitor must pay the indemnitee the full amount that the indemnitee paid the plaintiff.
True Or False The omnibus clause of most insurance policies has increased the need for automobile-consent statutes.
What was the common law rule regarding contribution, and what is the majority rule today?
What should a plaintiff do before agreeing to release a defendant?
A basketball player makes 75 % of his shots from the foul line. What is the probability of this player making 10 shots in a row from the foul line? Are there any assumptions we need to make to...
In exchange for land, the company received a 12-month note on January 1. The face amount of the note is $1,000, and the stated rate of interest is 13%, compounded annually. The 13% rate is equal to...
Using Chueh and Swansons method, estimate the specific heat capacity of ethyl bromide at 20 C.
Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,400 per unit; variable costs = $220 per unit; fixed costs = $3.9 million; quantity = 85,000 units....
Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,400 per unit; variable costs = $220 per unit; fixed costs = $3.9 million; quantity = 85,000 units....
We are evaluating a project that costs $924,000, has an eight-year life, and has no salvage value . Assume that depreciation is straight-line to zero over the life of the project. Sales are projected...
Select a company you are familiar with and detail one short-term and one longer-term strategy, then discuss how the role of human resource development can provide valuable advice and counsel in the...
Sunspot Beverages, Limited, of Fiji uses the weighted-average method of process costing. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then...
How does TPM intersect with Lean Manufacturing principles? Discuss the synergies between TPM and Lean practices, such as continuous improvement (Kaizen) and value stream mapping, in reducing waste...

The profitability index is a scale less attribute for measuring a projects benefits relative to the costs.

Question:

Step by Step Answer:

Since the profitability index is a modified purereturntype measure it off...View the full answer

Fundamentals of corporate finance

Students also viewed these Corporate Finance questions