Explain profitability index

Q: Contribution margin ratio definition and how is useful in planning business operations?

A: Solution:- Contribution margin ratio definition as follows:-

Q: Consider the advantages and disadvantages of using the accounting rate of return as an investing…

A: This question explains about  the advantages and disadvantages of using the accounting rate of…

Q: Discuss the market efficiency and its three forms.

A: The efficient market hypothesis (EMH)- states that the markets are generally efficient as it…

Q: How to correctly find the operating profit? Show an example please.

A: The calculation of operating profit is an important aspect of understanding the financial position…

Q: What is meant by the concept of “potential savings (profits)”?

A: Profit is the total revenues less all costs and expenses. In other words, profit is the net earnings…

Q: assumptions for the sales growth.

A: An organization always tries to maximize its profit and perform better than earlier. In order to do…

Q: Where are Financial costs and Dividends considered in a scenario analysis? Just a simple answer

A: Introduction :  A scenario analysis is a tool used to assess the potential outcomes of a given…

Q: Describe the ways to increase sales and profitability

A: Sales indicate the revenue generated by the business entity in consideration of offering their…

Q: Which two types of investment criteria are most frequently used by managers today? Multiple Choice O…

A: Net Present Value (NPV) is the difference between present value of cash inflows and present value of…

Q: Write the capitalized-cost equation?

A: Answer: Capitalized cost is well-defined as the present value of an annual cost constant over an…

Q: List and compare all advantages and disadvantages of Payback Period Rule, Average Accounting Return,…

A: Payback rule: The Payback period is the length of time required to recover the initial cost of a…

Q: Analyze the profitability graph that illustrates the factors/accounts that are needed to calculate…

A: The profitability graph: The profitability graph depicts all the inputs that are needed to compute…

Q: What are some possible financial decisions in which using the Present Value (PV) formula might be…

A: The present value (PV) is the current value provided a defined rate of return of a future amount of…

Q: Drw a Cash flow diagram for comparing cost-only?

A: Initial costs  The occurrence of cost at the time of design and the construction of the project.…

Q: How do you calculate enterprise value?

A: Enterprise value is the measure of the total value of the company. It gives aggregate value of the…

Q: Which of the following terms accurately describe what a resource is worth in its next- best use. a.…

A: In this question the factor which describes the best worth of resources is asked. We will analyse…

Q: Discuss the role of profit plan in implementing strategy.

A: Strategy: It is a plan of action that is framed to achieve the organizational overall goals.

Q: why net present value is considered to be superior to internal rate of return as an investment…

A: Investment- The purchase of an asset in order to generate income or capital gain is referred to as…

Q: ROI formula

A: Answer

Q: Which of the following is a typical key performance indicator for the financial perspective?…

A: The question is asking us to identify which of the given options is a typical key performance…

Q: Analysis of firm profitability – indicators, their meanings and relation to each other, methodical…

A: The income statement is a financial statement that shows the income and expenses of a company. It…

Q: What tool can you use to incorporate probabilities into the What-If analysis? Sensitivity…

A: The objective of the question is to identify the tool that can be used to incorporate probabilities…

Q: how present value is useful in economic decision making

A: Present value (PV) is the current value of a future sum of money or a stream of cash flows, given a…

Q: PROFITABILITY Solution and answer Interpretation Gross profit margin Operating profit margin Net…

A: Solution:- 1)Calculation of Gross profit margin as follows under:- Formula as follows under:-…

Q: Payback Period Modified Payback Period Net Present Value Profitability Index Accounting Rate of…

A: Here, we have to find these financial topics.

Q: When calculating a company’s WACC, should book value, market value, or targetweights be used?…

A: A company often raises money from various sources such that it has to provide a return in the form…

Q: What is the most fundamental factor in engineering economy? a. Compound amount factor b.…

A: Engineering economics is referred to as the subset of economy, which used to be concerned along with…

Q: Factors affecting investment decisions

A: Introduction: The Investment decision is the decision taken by shareholders or top-level management…

Q: Net working capital formula?

A: Net working capital is the difference between the current assets and current liabilities. It is the…

Q: Define Capital Asset Pricing Model (CAPM)

A: The CAPM or capital asset pricing model is considered to be a popular concept in finance. The main…

Q: What are the key determinants of an industry's profitability? What do you think is the most…

A: Profit is a very important concept in finance. Companies do business and run their operations in…

Q: What are the measures of investment worth based on yield? What are they called?

A: Investment worth based on yield means that an investor is expecting certain income on an investment…