The Jade Health Plan used a profitability index (PI) to rank the following capital proposals:
Proposal PI
A0.45
B1.05
This information indicates that, of these two projects, Jade would most likely select:
Proposal A, and the PI indicates that the net present value (NPV) for this project is less than zero
Proposal A, and the PI indicates that the net present value (NPV) for this project is greater than zero
Proposal B, and the PI indicates that the net present value (NPV) for this project is less than zero
Proposal B, and the PI indicates that the net present value (NPV) for this project is greater than zero
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