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?

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. Because the projects are independent and their PIs exceed 1.0, both projects should be accepted.

Question

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?

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. Because the projects are independent and their PIs exceed 1.0, both projects should be accepted.

Quizplus · Accepted Answer

The Answer of 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?

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. Because the projects are independent and their PIs exceed 1.0, both projects should be accepted.

You Are Considering Two Independent Projects Both of Which Have