131k views
0 votes
When potential capital investments of different size are​ compared

1 Answer

4 votes

Answer: profitability index

Explanation: When potential capital investment of different size are compared, management should choose the one with the:

Highest profitability index.The Profitability Index (PI) measures the ratio between the present value of future cash flows and the initial investment. The index is a useful tool for ranking investment projects and showing the value created per unit of investment.

User MichaelK
by
8.4k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.