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You calculate the PI of a project to be 1 but realize that some aspect of your calculation was incorrect and needs to be adjusted.
You calculate the PI of a project to be but realize that some aspect of your calculation was incorrect and needs to be adjusted. Which adjustment to the PI estimation should cause you to reject the project?A The cash flows were underestimated, so the adjusted annual cash flows are higher than the original ones.B The initial outlay estimation was inaccurate, and after you adjust it the new initial outlay is lower than the original.C The cost of capital was underestimated, so you adjust the cost of capital to be higher.D The length of project was underestimated, so in the new estimation, the life of the project is a couple of years longer with positive cash flows.
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