Using the profitability index, which of the following mutually exclusive projects should be accepted? Compute and show the PI for each project.

PI

Project A: NPV = $10,000; NINV = $50,000

Project B: NPV = -$10,000; NINV = $120,000

Project C: NPV = $2,000; NINV = $80,000

A

B

A and C

A and B

all projects should be accepted