Roger\'s Meat Market is considering two independent projects. The profitability

Question

Roger's Meat Market is considering two independent projects. The profitability index decision rule indicates that both projects should be accepted. This result most likely does which one of the following?

A) Conflicts with the results of the net present value decision rule

B) Assumes the firm has sufficient funds to undertake both projects

C) Agrees with the decision that would also apply if the projects were mutually exclusive

D) Bases the accept/reject decision on the same variables as the average accounting return

Explanation / Answer

B) Assumes the firm has sufficient funds to undertake both projects

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