In Capital Budgeting, the Profitability Index (PI) Decision Model Is

Multiple Choice

In capital budgeting, the profitability index (PI) decision model is best used to

A) Evaluate mutually exclusive investments of different sizes.
B) Adjust for inflation in the net present value (NPV) calculation.
C) Select projects when capital budgeting funds are limited.
D) Adjust for risk in capital budgeting decisions.
E) Adjust for the difference between the accounting rate of return (ARR) and the internal rate of return (IRR) .