42. If a proposal's profitability index is greater than one:

the net present value is negative.

the net present value is positive.

the net present value is zero.

none of these, because the net present value cannot be gauged by the profitability index. the proposal should be rejected.

43. A depreciation tax shield is a(n):

after-tax cash outflow.

increase in income tax.

factor that has no effect on cash flows.

reduction in income tax.

sporadic fluctuation in income tax.