You are analyzing the following project. It requires a 10% rate of return. All cash flows are assumed to be after-tax and they occur evenly over each year.

Year	Cash Flow: Project A	Discounted Cash Flows: Project A
0	-$240,000
1	$20,000
2	$65,000
3	$150,000
4	$250,000
NPV
IRR (15% Hurdle Rate)
Profitability Index

The PROFITABILITY INDEX (P.I.) for Project A is:

1.48

1.65

2.33

1.38

1.29

Based on your analysis, which one of the following statements is correct?

You should reject Project A, since its IRR is less than the hurdle rate.

You should reject Project A, since the NPV is negative.

You should accept Project A, since its NPV is positive.

You should reject Project A, since its IRR is equal to the hurdle rate.