The correct answer is D. greater than one.
The profitability index (PI) is a measure of a project’s profitability relative to its initial investment. It is calculated by dividing the project’s net present value (NPV) by its initial investment. A PI greater than one indicates that the project is profitable, while a PI less than one indicates that the project is not profitable.
The NPV is a measure of the present value of all future cash flows from a project, discounted at a rate that reflects the project’s risk. A positive NPV indicates that the project is expected to generate more cash than it costs to undertake, while a negative NPV indicates that the project is expected to lose money.
Therefore, if the NPV is positive, then the PI must also be positive, since the PI is simply the NPV divided by the initial investment.