Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 14 percent? Why or why not?

A)Yes; The PI is 0.96.
B)Yes; The PI is 1.04.
C)Yes; The PI is 1.08.
D)No; The PI is 0.96.
E)No; The PI is 1.04.

Question

Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 14 percent? Why or why not?

A)Yes; The PI is 0.96. 
B)Yes; The PI is 1.04. 
C)Yes; The PI is 1.08. 
D)No; The PI is 0.96. 
E)No; The PI is 1.04.

Quizplus · Accepted Answer

The Answer of Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 14 percent? Why or why not?

A)Yes; The PI is 0.96. 
B)Yes; The PI is 1.04. 
C)Yes; The PI is 1.08. 
D)No; The PI is 0.96. 
E)No; The PI is 1.04.

Based on the Profitability Index Rule, Should a Project with the Following