In: Finance
As a general rule, if using the Profitability Index as a guide to accept/reject a project, | |||||
you should accept the project if the Profitability Index is | |||||
a | equal to 0 | ||||
b | greater than 0 | ||||
c | greater than 1 | ||||
d | greater than the IRR |
Profitability Index = Present value of cash Inflows/Present value of cash outflows
You should accept the Project if Profitability Index is greater than 1.
Answer C