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You are considering two independent projects both of which have been assigned a discount rate of 1 2 percent. Project A costs $ 3 9
You are considering two independent projects both of which have been assigned a discount rate of percent. Project A costs $ and produces cash flows of $ a year for three years. Project B costs $ and produces cash flows of $ a year for two years. Based on the profitability index PI what is your recommendation concerning these projects?
Multiple Choice
Accept Project A and reject Project B
Accept Project B because it has the lower PI
Accept Project A because it has the lower PI
Accept both projects
Reject Project A and accept Project B
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