According to the profitability index criterion, a project is acceptable if its profitability index is greater than ____.
A) 1 plus the cost of capital
B) 0
C) or equal to 1
D) 1.1

Question

Quizplus · Accepted Answer

According to the profitability index criterion, a project is acceptable if its profitability index is greater than or equal to 1. This means that the present value of cash inflows is greater than or equal to the initial investment. Therefore, option C is the correct answer. Option D is not a universally applicable benchmark and options A and B are not accurate.

According to the Profitability Index Criterion, a Project Is Acceptable