A is corrent. The profitability index is calculated as the ratio of the net present value of the project to its initial cost.
B is incorrect. The internal rate of return is the discount rate that equates the cost of the project to its discounted future cash flows.
C is incorrect. The economic value-added is a measure of economic profit.
D is incorrect. Discounted payback is the number of years it takes to recover the investment on a discounted cash flow basis.
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