Widget Manufacturing Company is considering two different investment projects. The net cash flow after taxes for each project is given in the table below. The firm's cost of capital is 9%. NCF After Taxes Project A/ Project B Year 1 12000/ 3000 Year 2 13000/ 5000 Year 3 12000 /9000 Year 4 10000 /15000 Year 5 14000 /17000 Net Investment (NINV) 35000/ 35000 All of the following statements about this scenario and the profitability index are TRUE except:

a. The profitability index is the ratio of the present value of expected net cash flows over the life of the project to the net investment. b. Project A is acceptable because the PI is 1.35 c. Project B is acceptable because the PI is 2.02 d. When comparing mutually exclusive investments, the accept-reject signals may not match accept-reject signals for the very same projects using net present value criterion.