Question

If a project's profitability index is equal to 1 then npv is

Answer 1

please check this is right answer

Answer 2

Answer:

If a project's profitability index is equal to 1 then Net present value is positive.

Explanation:

Profitability index is 1 at a point where the future inflows plus initial investment is equal.

It is also a break even point where the present value of future income is equal to initial investment made.

It is always suggested to have profitability index more than 1.