Which of the Following Is TRUE Regarding the Profitability Index

Multiple Choice

Which of the following is TRUE regarding the profitability index?

A) It does not use the net present value (NPV) to assess benefits.
B) It is very simple to compute.
C) Attention must be taken when using it to make sure that all of the constrained resource is utilized.
D) It is unreliable when used for choosing between different projects.
E) It ignores cash flows after the cutoff