Answer Happy

Which of the following statements is true? 1. In preference decisions, the profitability index and internal rate of return methods will rank projects in the same order of preference. II. In calculating the "investment required for the profitability index, the amount invested should not be reduced by any salvage recovered from the sale of old equipment. III. When computing the profitability index of an investment project, the investment required should exclude any investment made in working capital at the beginning of the project. Multiple Choice Only statement I is true. Only statement Ill is true. All of the statements are true.