The Profitability Index for a Project That Has an Initial

Multiple Choice

The profitability index for a project that has an initial cost of $500 is equal to one when the firm's risk-adjusted discount rate is equal to 11 percent,

A) so the project's internal rate of return is greater than 11 percent.
B) so the project's net present value is equal to zero.
C) so the project's net present value is equal to $500.
D) None of the above is correct.