The profitability index (PD) is a capital budgeting tool that provides another way to compare a project's benefits and costs. It is computed as a ratio of the discounted value of the net cash flows expected to be generated by a project over its life (the project's expected benefits) to its net cost (NINV). A project's PI value can be interpreted to indicate a project's discounted return generated by each dollar of net investment required to generate those returns. Blue Moose Home Builders is considering investing $600,000 in a project that is expected to penerate the following net cash flows: Blue Moose uses a WACC of 8% when evaluating proposed capital budoeting projects. Based on these cash flows, determine this project's pt (rounded to four decimal places) 2.2083 2.0921 2.3245 2.5570 Blue Moose's decision to accept or reject this project is independent of its decisions on other projects, Based on the prolect's pr, the firm should the project. Br comparison, the net present value (NPV) of this project is in the project because the oroject . On the basls of this evaluation criterion, Elue Moose should lincrease the flrm's value. When a project has a p1 greater than 1,00 , it will exhibit an NPV Prolects with Pis 1.00 will exhibit negative NPVS: ; When it has a PI of 1.00 , it will have an NAPV equal to so