A profitability index of 0.90 for a project means:

CS Executive · Financial and Strategic Management · PYQS · June 2021

(A) The present value of benefits is 90% greater than the project's costs

(B) The project's NPV is positive

(C) The project returns 90 cents in present value for each current rupee invested

(D) The payback period is less than two years

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Capital Budgeting