Q473
Profitability index in capital budgeting is used for
A.
negative projects
B.
relative projects
C.
evaluate projects
AnswerD.
earned projects
Answer: Option C
Solution
Answer: Option C
Solution:
Profitability index in capital budgeting is used for evaluating projects. The profitability index is an appraisal technique applied to potential capital outlays and is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment.