Garrison Company has two investment opportunities. A cash flow schedule for the investments is provided below:

Year Investment A Investment B
0 $(4,700 ) $(5,550 )
1 1,880 2,820
2 1,880 1,880
3 1,880 1,880
4 1,880 940

Considering the unequal investments, which of the following techniques would be most appropriate for choosing between Investment A and Investment B?

a. Payback technique
b. Present value index
c. Net present value technique
d. None of these answers is correct.

b. Present Value Index

Explanation:

Present Value Index (PVI) is the ratio of net present value of a project, to the initial outlay needed for it. Net Present value (NPV) refers to expected income inflow from a project in different time periods, adjusted to discount rate between the current & further time period.

So, to compare 2 investment projects, investment A & investment B: It needs to compute NPV of expected inflows - per unit investment expenditure,  i.e PVI. The investment option having higher Present Value Index [PVI], i.e net present value per unit investment expenditure, should be chosen.

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'

answer; swot analysis;