Based on the Profitability Index (PI) Rule, Should a Project

question 37

Multiple Choice

Based on the profitability index (PI) rule, should a project with the following cash flows be accepted if the discount rate is 8 percent? Why or why not?

• A) Yes; because the PI is .98
• B) Yes; because the PI is 1.03
• C) No; because the PI is .95
• D) No; because the PI is .98
• E) No; because the PI is 1.03

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