43. A capital investment is one that

a) has the prospect of long-term benefits.

b) has the prospect of short-term benefits.

c) is only undertaken by large corporations.

d) applies only to investment in fixed assets.

44. A profitability index of .85 for a project means that:

a) the present value of benefits is 85% greater than the project's costs.

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 payback period is less than one year.

45. Which of the following statements is correct?

a) If the NPV of a project is greater than 0, its PI will equal 0.

b) If the IRR of a project is 0%, its NPV, using a discount rate, k, greater than 0, will be 0.

c) If the PI of a project is less than 1, its NPV should be less than 0.

d) If the IRR of a project is greater than the discount rate, k, its PI will be less than 1 and its NPV will be greater than 0.