Should this project be accepted based on profitability index

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Reference no: EM131064920

Nelson's Lamps is considering the acquisition of some new store fixtures. These fixtures will cost $189,000 and generate the following cash flows over its 5-year life: $65,700, $69,800, $57,600, $54,200 and $11,500. Should this project be accepted based on profitability index (PI) if the required rate of return is 13.5%? Why or why not?

A. yes; because the PI is greater than 1.0

B. yes; because the PI is less than 1.0

C. no; because the PI is greater than 1.0

D. no; because the PI is equal to 1.0

E. no; because the PI is less than 1.0ot?

Reference no: EM131064920

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