Use the PI decision rule to evaluate this project; should it be accepted or rejected?
A) -.39%, reject
B) .39%, accept
C) -38.88%, reject
D) 38.88%, accept

Question

Quizplus · Accepted Answer

The PI (profitability index) decision rule states that projects with a PI greater than 1 should be accepted, while projects with a PI less than 1 should be rejected. Only option D has a PI greater than 1 (38.88%), so the project should be accepted based on the PI decision rule.

Use the PI Decision Rule to Evaluate This Project; Should