Question: Consider two mutually exclusive projects: A and B. Project A has a profitability index of 3.6, and project B has a profitability index of 4.

Consider two mutually exclusive projects: A and B. Project A has a profitability index of 3.6, and project B has a profitability index of 4. Which of the following statements is true for sure?

A. Project A will add the same value to the firm as will project B.

B. Project B will add more value to the firm than will project A.

C. Project A will add more value to the firm than will project B.

D. Both projects have a positive NPV.

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