A profitability index of 0.50 for a project means that The project returns 50% in present value for each current dollar invested The project's costs are less than the present value of the project's benefits The project's costs are more than the present value of the project's benefits The project's costs are equal to the present value of the project's benefits

A profitability index of 0.50 for a project means that The project returns 50% in present value for each current dollar invested The project's costs are less than the present value of the project's benefits The project's costs are more than the present value of the project's benefits The project's costs are equal to the present value of the project's benefits

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 7P

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Explain how the internal rate of return and net present value are related. If a project has an NPV of $50,000 using a 10 percent discount factor, what does this imply about that project's IRR?
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