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Based on the Profitability Index (PI) Rule,should a Project with the Following

Question 8

Multiple Choice

Based on the profitability index (PI) rule,should a project with the following cash flows be accepted if the discount rate is 8%? Why or why not?
Based on the profitability index (PI) rule,should a project with the following cash flows be accepted if the discount rate is 8%? Why or why not? A) Yes; because the PI is 1.008. B) Yes; because the PI is .992. C) Yes; because the PI is .999. D) No; because the PI is 1.008. E) No; because the PI is .992.


A) Yes; because the PI is 1.008.
B) Yes; because the PI is .992.
C) Yes; because the PI is .999.
D) No; because the PI is 1.008.
E) No; because the PI is .992.

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