An Investment Has Conventional Cash Flows and a Profitability Index

Multiple Choice

An investment has conventional cash flows and a profitability index of 1.0.Given this, which one of the following must be true?

A) The internal rate of return exceeds the required rate of return.
B) The investment never pays back.
C) The net present value is equal to zero.
D) The average accounting return is 1.0.
E) The net present value is greater than 1.0.