An investment is acceptable if the profitability index (PI) of the investment is:
A) greater than one.
B) less than one.
C) greater than the internal rate of return (IRR).
D) less than the net present value (NPV).
E) greater than a pre-specified rate of return.

Question

Quizplus · Accepted Answer

An investment is acceptable if the profitability index (PI) of the investment is greater than one, as a PI greater than one indicates that the project generates more cash flows than the amount invested.

An Investment Is Acceptable If the Profitability Index (PI) of the Investment