You are considering a project with conventional cash flows using the following data for this project:

Payback period 2.5 years

Profitability ratio 0.89

Net present value $795

Internal rate of return 8.7

percent Required return 9.5 percent

Which one of the following is correct given this information?

A. The discounted payback period will have to be greater than 2.5 years.

B. The discount rate used in computing the net present value is less than the internal rate of return.

C. The discount rate used to compute the net present value is equal to the internal rate of return.

D. This project should be accepted based on the profitability ratio. E. This project should be accepted based on the net present value.