An investment is acceptable if the profitability index (PI)of the investment is:
A)less than one.
B)greater than one.
C)greater than the internal rate of return (IRR).
D)less than the net present value (NPV).
E)greater than a pre-specified rate of return.

Question

Quizplus · Accepted Answer

An investment is considered acceptable if the profitability index (PI) is greater than one, as this indicates that the present value of future cash flows is greater than the initial investment cost, signifying a profitable investment.

An Investment Is Acceptable If the Profitability Index (PI)of the Investment