You are considering two independent projects both of which have been assigned a discount rate of $8$ percent. Based on the profitability index $($PI$),$ what is your recommendation concerning these projects?

Project A Project B

Year Cash Flow Year Cash Flow

$0-$$$38,5000-$$$42,000$

$1$ $$20,0001$ $$10,000$

$2$ $$24,0002$ $$40,000$

Group of answer choices

You should only accept project B since it has the largest PI and the PI exceeds $1.$

You should accept only project A since it has the higher PI$.$

Neither project is acceptable.

You should accept both projects since both of their PIs are greater than $1.$

You should accept both projects since both of their PIs are positive.