Question: 11. (2 points) What would be a situation where we might we decide to include the Profitability Index in the evaluation of two projects after

11. (2 points) What would be a situation where we might we decide to include the

Profitability Index in the evaluation of two projects after we have calculated the

respective NPV for each project?

12. (3 points) Why should we consider including scenario analysis when evaluating projects

based on NPV?

13. (3 points) What is the Multiple IRR problem and what type of cash flows for a project

would result in multiple IRRs?

14. (3 points) What are some of the issues relating to the validity of the ratio used to

calculate Average Accounting Return?

15. (2 points) What is erosion as it relates to the cash flows of an existing project?

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