Profitability index employs some sort of arbitrary value against which the project measurement must be compared when determining whether to accept or reject a project.

Question

Quizplus · Accepted Answer

Profitability index calculates the ratio of the present value of future expected cash flows to the initial investment, providing a direct measure of the value created per unit of investment, without using an arbitrary value for comparison.

Profitability Index Employs Some Sort of Arbitrary Value Against Which