A Project Has Cash Flows of -$152,000, $60,800, $62,300 and $75,000

Multiple Choice

A project has cash flows of -$152,000, $60,800, $62,300 and $75,000 for Years 0 to 3, respectively. The required rate of return is 13 percent. What is the profitability index? Should you accept or reject the project based on this index value?

A) .93; accept
B) 1.07; accept
C) 1.02; accept
D) .93; reject
E) 1.07 reject