Consider the four capital budgeting projects listed below.

Project A Project B Project C Project D

Profitability

Index

$0\mathrm{.}50$

$1\mathrm{.}36$

$0\mathrm{.}25$

$2\mathrm{.}32$

The appropriate cost of capital is $8\mathrm{.}5\%.$ If these projects are mutually independent and the company is not practicing capital rationing, which one or ones of these four projects shall be accepted?

$$ A

D

B

C