Which of these statements about how the profitability index is used in capital budgeting is not true?

it is a measure of value received per dollar invested and is used to rank projects in a given period.

it is calculated using IRR.

it aids in the process of choosing the most valuable bundle of projects that the firm can afford.

it is used when firms do not have enough funds for all acceptable projects.

it is used in a situation of capital rationing.