You would like to invest in the following project. Sis,your boss,insists that only projects returning at least $1.06 in today's dollars for every $1 invested can be accepted.She also insists on applying a 14 percent discount rate to all cash flows.Based on these criteria,you should:
A)accept the project because the PI is 0.90.
B)accept the project because the PI is 1.07.
C)accept the project because the PI is 1.11.
D)reject the project because the PI is 0.90.
E)reject the project because the PI is 1.07.

Question

You would like to invest in the following project.  Sis,your boss,insists that only projects returning at least $1.06 in today's dollars for every $1 invested can be accepted.She also insists on applying a 14 percent discount rate to all cash flows.Based on these criteria,you should:
A)accept the project because the PI is 0.90. 
B)accept the project because the PI is 1.07. 
C)accept the project because the PI is 1.11. 
D)reject the project because the PI is 0.90. 
E)reject the project because the PI is 1.07.

Quizplus · Accepted Answer

The Answer of You would like to invest in the following project.  Sis,your boss,insists that only projects returning at least $1.06 in today's dollars for every $1 invested can be accepted.She also insists on applying a 14 percent discount rate to all cash flows.Based on these criteria,you should:
A)accept the project because the PI is 0.90. 
B)accept the project because the PI is 1.07. 
C)accept the project because the PI is 1.11. 
D)reject the project because the PI is 0.90. 
E)reject the project because the PI is 1.07.

You Would Like to Invest in the Following Project