If a project's profitability index is greater than 1, then the
A) project should always be accepted.
B) project's net present value is negative.
C) project's internal rate of return is less than the discount rate.
D) project should be accepted if funds are available.

Question

Quizplus · Accepted Answer

A profitability index greater than 1 indicates that the project's net present value is positive, suggesting it is a good investment. However, acceptance depends on the availability of funds and other investment opportunities.

If a Project's Profitability Index Is Greater Than 1, Then