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4 August, 23:24

When potential capital investments of different size are compared

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  1. 4 August, 23:44
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    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.
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