Smith Corporation Is Considering the Following Three Investment Opportunities

Smith Corporation is considering the following three investment opportunities:
Project 1: Has an initial cost of $900,000 and the present value of its net cash inflows is $990,000.
Project 2: Has an initial cost of $950,000 and the present value of its net cash inflows is $1,026,000.
Project 3: Has an initial cost of $700,000 and the present value of its net cash inflows is $784,000.
Which of the following statements is correct?

A) Using the profitability index, the project ranking, from most profitable to least profitable would be 2, 1, and 3.
B) Using the net present value method, the project ranking, from most profitable to least profitable would be 2, 3, and 1.
C) Using the profitability index, the project ranking, from most profitable to least profitable would be 3, 1, and 2.
D) Using the net present value method, the project ranking, from most profitable to least profitable would be 3, 1, and 2.