The following information is available for two potential investments by Panda Company: ` Project Red Project Green Initial investment $40,000 $70,000 Net annual cash flow 10,000 19,300 Net present value 18,112 25,875 Salvage value 5,000 0 Useful life 10 yrs. 8 yrs. Using profitability index as a screening method, Panda should

Group of answer choices

Accept Project Red because it has a higher profitability index.

Accept Project Red because it has a lower profitability index.

Accept Project Green because it has a higher profitability index.

Accept Project Green because it has a lower profitability index.