Project based on the profitability index criterion

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ABC Inc. is looking at investing in a 3-year project that will create cash inflows of $7,000 in the first year, $8,000 in the second year, and $9,000 in the third year. The cost of this project is $18,000, and the required return is 12%. Should the company invest in this project based on the profitability index criterion?

A. 0.94

B. 1.06

C. 1.14

D. 1.38

E. 1.45

Reference no: EM131599802

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