If the Discount Rate Is 14% and the Firm Has

Multiple Choice

If the discount rate is 14% and the firm has limited funds, which of the following is true?

A) The PI of project A is less than 1.0.
B) The PI of project B is less than 1.0.
C) Based on the PI rule, project A is preferable.
D) Both projects would be rejected based on the PI rule.
E) The project with the smaller initial investment always has the higher PI.