Using the Profitability Index Method, the Present Value of Cash

Multiple Choice

Using the profitability index method, the present value of cash inflows for Project Flower is $88,000 and the present value of cash inflows of Project Plant is $48,000. If Project Flower and Project Plant require initial investments of $90,000 and $40,000, respectively, and have the same useful life, the project that should be accepted is

A) Project Flower.
B) Project Plant.
C) Either project may be accepted.
D) Neither project should be accepted.