Jefferson International is trying to choose between the following two mutually exclusive design projects: The required return is 12 percent. Besides the fact the NPV is the best way to make investment decision rules, why would concerns be raised if the company made their decision based on the profitability index? If the company applies the NPV decision rule, which project should it take? The PI info is not needed if one states that PI should not be applied to Mutually Exclusive Projects

Cash Flow (B $38,000 17,800 4.200 19,800 Cash Flow (A -$75,000 32.400 30,200 36,600 Yea 3