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If a Proposal's Profitability Index Is Greater Than One

Question 49

Multiple Choice

If a proposal's profitability index is greater than one:


A) the net present value is negative.
B) the net present value is positive.
C) the net present value is zero.
D) none of these, because the net present value cannot be gauged by the profitability index.
E) the proposal should be rejected.

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