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24) A profitability index of .85 for a project means that A) the payback period is less than one year B) the project's NPV is
24) A profitability index of .85 for a project means that A) the payback period is less than one year B) the project's NPV is greater than zero C) the project returns 85 cents in present value for each current dollar invested D) the present value of benefits is 85% greater than the project's costs 25) Hi lighter, Inc., is considering a project with an initial investment of $50,000 that generates y end cash-inflows of $20,000 per year for 8 years starting one year from today. What is the ne' present value of this project if the firm requires a 15% rate of return? A) $45,708 B) $110,000 C) $42,700 D) $39,746 26) A correlation coefficient of 0.7 indicates that the returns from two securities A) are perfect mirror images of each other B) tend to move in opposite directions C) move independently of each other D) tend to move in the same direction
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