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X is considering the following two projects:

Project #1 Initial investment $20,000; PV of cash inflows 26,000

Project #2 Initial investment $20,000; PV of cash inflows 66,000

Which of the following statements is true when comparing each of these projects?

a. Project #1 has a higher profitability index.

b. Project #2 has a higher net present value.

c. They both have the same profitability index.

d. They both have an unacceptable profitability index.