alleryStart learning →If a project's profitability index is below one, what does it show?
APayback is under one year
BPV of inflows exceeds outlay
CIRR exceeds the cost of funds
DPV of inflows is below outlay
Answer & Solution
Correct answer: D. PV of inflows is below outlay
A PI under one means discounted inflows fall short of the initial outlay, so the project destroys value.
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