When using a profitability index to select projects, a value of .63 is preferred over a value of 0.21.

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A profitability index (PI) is a tool used in capital budgeting to evaluate the profitability of investment opportunities. The PI is calculated as the present value of future cash flows divided by the initial investment. A PI greater than 1 indicates that the project is expected to generate positive net present value and is generally considered acceptable. Therefore, a PI of 0.63 is preferred over a PI of 0.21 since the former indicates a higher expected return on investment.

When Using a Profitability Index to Select Projects, a Value