Nelsons Industrial Supply is considering a project that has projected cash inflows of $8,400 a year for 3 years. The initial cost of the project is $21,000 and the required return is 10.75 percent. Should this project be accepted based on the profitability index criterion? Why or why not?

multiple choice:

Multiple Choice

• no; because the PI is 1.54

• yes; because the PI is 1.54

• yes; because the PI is .98

• no; because the PI is .98