The benchmark for the profitability index (PI) is the
A) cost of capital.
B) managers' maximum number of years.
C) zero or anything larger than zero.
D) zero or anything less than zero.

Question

Quizplus · Accepted Answer

The benchmark for the profitability index (PI) is zero or anything larger than zero. A PI greater than 0 indicates that the project's present value of future cash flows exceeds the initial investment, suggesting it is a profitable venture.

The Benchmark for the Profitability Index (PI) Is the