negative index
exchange index
project index
profitability index
Answer is Right!
Answer is Wrong!
The correct answer is D. profitability index.
The profitability index (PI) is a capital budgeting tool that is used to compare the profitability of different projects. It is calculated by dividing the present value of the project’s future cash flows by the initial cost of the project. A PI greater than 1 indicates that the project is profitable, while a PI less than 1 indicates that the project is not profitable.
The other options are incorrect. A negative index is not a valid concept in capital budgeting. An exchange index is a measure of the relative value of two currencies. A project index is a measure of the overall performance of a project.