You are considering two independent projects both of which have been assigned a discount rate of 15 percent. Based on the profitability index, what is your recommendation concerning these projects?

Project A Project B

Year Cash Flow Year Cash Flow
0 -46,000 0 -50,000

1 32,000 1 18,000

2 27,000 2 54,000


A. You should accept both projects.
B. You should reject both projects.
C. You should accept project A and reject project B.
D. You should accept project B and reject project A.
E. You should accept project A and be indifferent to project B.