alleryStart learning →A firm spends Rs 1,50,000 on a project with NPV of Rs 30,000. What is its profitability index?
A0.8
B5.0
C1.3
D1.2
Answer & Solution
Correct answer: D. 1.2
PI = 1 + NPV divided by investment = 1 + 30,000/1,50,000 = 1.2.
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