If a company's required rate of return is 6%, and a project has an index greater than 1, in using the profitability index method, this indicates that the project's rate of return is

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A profitability index greater than 1 indicates that the present value of future cash flows is greater than the initial investment, meaning the project's rate of return exceeds the company's required rate of return of 6%.

If a Company's Required Rate of Return Is 6%, and a Project