Analysis Using the Profitability Index

Multiple Choice

Analysis using the profitability index

A) frequently conflicts with the accept and reject decisions generated by the application of the net present value rule.
B) is useful as a decision tool when investment funds are limited.
C) offers no real value when making capital structure decisions.
D) utilizes the same basic variables as those used in the average accounting return.
E) produces results that typically are difficult to comprehend or apply.