You are considering two independent projects with the following cash flows, both of which have been assigned a discount rate of 9.5 %. Based on the profitability index (PI), what is your recommendation concerning these projects?
A) Accept Project A only.
B) Accept Project B only.
C) Accept both Project A and B.
D) Reject both Project A and B.
E) You cannot use the PI method of analysis in this situation.

Question

You are considering two independent projects with the following cash flows, both of which have been assigned a discount rate of 9.5 %. Based on the profitability index (PI), what is your recommendation concerning these projects?  
A) Accept Project A only. 
B) Accept Project B only. 
C) Accept both Project A and B. 
D) Reject both Project A and B. 
E) You cannot use the PI method of analysis in this situation.

Quizplus · Accepted Answer

The Answer of You are considering two independent projects with the following cash flows, both of which have been assigned a discount rate of 9.5 %. Based on the profitability index (PI), what is your recommendation concerning these projects?  
A) Accept Project A only. 
B) Accept Project B only. 
C) Accept both Project A and B. 
D) Reject both Project A and B. 
E) You cannot use the PI method of analysis in this situation.

You Are Considering Two Independent Projects with the Following Cash