Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 14 compounded annually Why or why not Year Cash Flows 0 $32,100 1 11,800 2 0 3 22,600 a Yes, the profitability index is 0 96 b Yes, the profitability index is 0 80 c Yes, the profitability index is 1 08 d No, the profitability index is 0 96 e No, the profitability index is 0 80

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Question: Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 14% compounded annually? Why

Based on the profitability index rule, should a project with the following cash flows be accepted if the discount rate is 14% compounded annually? Why or why not?

Year	Cash Flows
0	-$32,100
1	11,800
2	0
3	22,600

a. Yes, the profitability index is 0.96.

b. Yes, the profitability index is 0.80.

c. Yes, the profitability index is 1.08.

d. No, the profitability index is 0.96.

e. No, the profitability index is 0.80.

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