The ____ is interpreted as the ____ for each dollar of initial investment.
A) net present value; present value return
B) profitability index; cash flow return
C) profitability index; present value return
D) None of these is correct

Question

Quizplus · Accepted Answer

The profitability index is a ratio that measures the present value of future cash flows generated by an investment in relation to the initial investment. Therefore, option C is the correct choice as it identifies the profitability index as the parameter used to interpret the present value return for each dollar of initial investment. Options A and B are incorrect as these do not accurately describe the interpretation of the profitability of an investment. Option D is incorrect as it suggests that none of the provided choices are correct, which is not the case.

The ____ Is Interpreted as the ____ for Each Dollar

The Is Interpreted as the for Each Dollar