Compute the PI statistic for Project Q and advise the firm whether to accept or reject the project with the cash flows shown as follows if the appropriate cost of capital is 12 percent. Project Q Time 0 1 2 3 4 5 Cash Flow $ 1,000 $ 250 $ 180 $ 420 $ 300 $ 100

Multiple Choice:

1)The project's PI is 3.70 percent, and the project should be accepted.

2)The project's PI is 8.70 percent, and the project should be rejected.

3)The project's PI is 5.70 percent, and the project should be accepted.

4)The project's PI is 11.70 percent, and the project should be rejected.