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A profitability index of .85 for a project means that:

 

the present value of benefits is85% greater than the project's costs.

 

the project's NPV is greater than zero.

 

the project returns85 cents in present value for each current dollar invested.

 

the payback period is less than one year.

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تم إضافة السؤال من قبل Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company
تاريخ النشر: 2015/04/02
Wolf Klaas Kinsbergen
من قبل Wolf Klaas Kinsbergen , Managing Director, Designer , ingenieursbureau KB International NV

That means the Project has a big Problem, it only returns85% of what is invested

Wasi Rahman Sheikh
من قبل Wasi Rahman Sheikh , Warehouse Supervisor , AL MUTLAQ FURNITURE MFG

Option c is correct answer ??????????

My answer is option (C) the project returns 85 cents in present value for each current dollar invested.

مستخدم محذوف‎
من قبل مستخدم محذوف‎

A regulation for evaluating whether to proceed with a project or investment. The profitability index rule states: If the profitability index or ratio is greater than1, the project is profitable and may receive the green signal to proceed. Conversely, if the profitability ratio or index is below, the optimum course of action may be to reject or abandon the project.

the project returns85 cents in present value for each current dollar invested.

Alex Al Yazouri
من قبل Alex Al Yazouri , General Manager , Al Mushref Cooperative Society

>>>>>>>>>>>>>>>>> the project returns85 cents in present value for each current dollar invested.

Mohammed Shahid Ullah
من قبل Mohammed Shahid Ullah , Executive Director (Finance) , Coal Power Generation Company Bangladesh Limited

the project returns85 cents in present value for each current dollar invested i.e. Net present value is less then Zero. 

 

مستخدم محذوف‎
من قبل مستخدم محذوف‎

Thanks to experts 

Well answers 

Anas  Dawah
من قبل Anas Dawah , Senior Internal Auditor , Talal Abu-Ghazaleh Global (TAGI)

the project returns85 cents in present value for each current dollar invested ------------------------------#.

Muhammad Ramzan Tufail  ACCA
من قبل Muhammad Ramzan Tufail ACCA , Assistant Finance Manager , Eltizam Asset Management Group

Correct Ans is.:

 

The project returns85 cents in present value for each current dollar invested.......................

Emad Mohammed said abdalla
من قبل Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company

>>>>>>>>>>>>> the project returns85 cents in present value for each current dollar invested.

Nasir Hussain
من قبل Nasir Hussain , Sales And Marketing Manager , Pakistan Pharmaceutical Products Pvt. Ltd.

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The project returns85 cents in present value for each current dollar invested...... . . .

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