We compute the profitability index of a capital-budgeting proposal by
A) multiplying the IRR by the cost of capital.
B) dividing the present value of the annual after-tax cash flows by the cost of capital.
C) dividing the present value of the annual after-tax cash flows by the cost of the project.
D) multiplying the cash inflow by the IRR.
Answer: C
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Fill in the blank with correct word.
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Which of the following best explains the recent decline in the role of financial intermediaries?
A) Private production and sale of information B) Government regulation to increase information C) Improvements in information technology D) None of the above can explain the recent decline
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