1. Rogers Meat Market is considering two independent projects. The profitability index decision rule indicates that both projects should be accepted. The result most likely does which one of the following?
Conflicts with the results of the net present value decision rule.
Assumes the firm has sufficient funds to undertake both projects.
Agrees with the decision that would also apply if the project were mutually exclusive.
Based the accept/reject decision on the same variables as average accounting return.
Fails to provide useful information as the firm must reject at least one of the projects.
2. Which one of the following methods determines the amount of the change a proposed project will have on the value of a firm?
Net present value
Discount payback
Internal rate of return
Profitability index
Payback