Answer: Option B
Explanation: The profitability index, referred to alternatively as the value investment ratio (VIR) or profit investment ratio (PIR), describes an indicator that measures the cost-benefit relationship of a proposed development.
The index of profitability is an evaluation methodology applicable to the possible expenditure of resources. The formula splits the estimated capital inflow to assess a project's viability by the expected capital outflow.
It is important to understand how the methodology ignores contract scope when using the profitability index to assess the attractiveness of projects. As their profit margins are not as huge, projects with greater cash inflows may lead to lower profitability measure estimates.