You are considering two independent projects, both of which have been assigned a discount rate of 8 %. Based on the profitability index, what is your recommendation concerning these projects?
A) You should accept both projects since both of their PIs are positive.
B) You should accept project A since it has the higher PI.
C) You should accept both projects since both of their PIs are greater than 1.
D) You should only accept project B since it has the largest PI and the PI exceeds 1.
E) Neither project is acceptable.

Question

You are considering two independent projects, both of which have been assigned a discount rate of 8 %. Based on the profitability index, what is your recommendation concerning these projects? 
A) You should accept both projects since both of their PIs are positive. 
B) You should accept project A since it has the higher PI. 
C) You should accept both projects since both of their PIs are greater than 1. 
D) You should only accept project B since it has the largest PI and the PI exceeds 1. 
E) Neither project is acceptable.

Quizplus · Accepted Answer

The Answer of You are considering two independent projects, both of which have been assigned a discount rate of 8 %. Based on the profitability index, what is your recommendation concerning these projects? 
A) You should accept both projects since both of their PIs are positive. 
B) You should accept project A since it has the higher PI. 
C) You should accept both projects since both of their PIs are greater than 1. 
D) You should only accept project B since it has the largest PI and the PI exceeds 1. 
E) Neither project is acceptable.

You Are Considering Two Independent Projects, Both of Which Have