When making preference decisions about competing investment proposals, the internal rate of return is superior to the project profitability index.

Question

Quizplus · Accepted Answer

The project profitability index takes into account the initial investment required and the present value of future cash flows, making it a more comprehensive measure of profitability than the internal rate of return. Therefore, the project profitability index is generally considered superior when making preference decisions about competing investment proposals.

When Making Preference Decisions About Competing Investment Proposals, the Internal