Which one of the following indicates that a project should be rejected?
A)Average accounting return that exceeds the requirement
B)Payback period that is shorter than the requirement period
C)Positive net present value
D)Profitability index less than 1.0
E)Internal rate of return that exceeds the required return

Question

Quizplus · Accepted Answer

A profitability index less than 1.0 indicates that the project's present value of cash inflows is less than the present value of cash outflows. This means the project is not profitable, and therefore it should be rejected.

Which One of the Following Indicates That a Project Should