You are studying a project whose data is as follows:

Internal rate of return 8.7 Profitability index 0.98 Net present value -393 Payback time 2.44 years Rate Return required 9.5

Which of the following answers is correct given this information? Question 5 options:

This project should be accepted on the basis of the profitability index.

The discount rate used to calculate the net present value must be less than 8.7%.

This project should be rejected based on internal rate of return.

The discount rate used to calculate the profitability index was equal to the internal rate of return.