The Gomez Company is considering two projects, T and V. The following information has been gathered on these projects:
Project T Project V
Initial investment needed..............................$112,500 $75,000
Present value of future cash inflows.............. $168,000 $107,000
Useful life.................................................... 10 years 10 years
Based on this information, which of the following statements is (are) true?
I. Project T has the highest ranking according to the project profitability index criterion.
II. Project V has the highest ranking according to the net present value criterion.
a) Only I
b) Only II
c) Both I and II
d) Neither I nor II