You Are Considering Two Independent Projects Both of Which Have

Multiple Choice

You are considering two independent projects both of which have been assigned a discount rate of 8% .Based on the profitability index,what is your recommendation concerning these projects?
$$\begin{array} { | l | l | l | } \hline \text { Year } & \text { Project A } & \text { Project } \mathbf { B } \\\hline 0 & \text { -£38,500 } & -£42,000 \\\hline 1 & £20,000 &£ 10,000 \\\hline 2 & £24,000 & £ 40,000 \\\hline\end{array}$$

A) You should accept both projects since both of their PIs are positive.
B) You should accept project A since it has the higher PI.
C) You should accept both projects since both of their PIs are greater than 1.
D) You should only accept project B since it has the largest PI and the PI exceeds 1.
E) Neither project is acceptable.