A $4 million investment today, in a project to last 10 years, is believed to result in the following incremental cash flows:

• annual increase in sales of $2,100,000
• operating expenses will be 50% of sales
• there is a $30,000 NWC investment associated with this project that is fully recovered at the end of the project's life
• assets purchased for this project are depreciated to zero value using straight-line over the project's complete life
• market value of assets at end of life are expected to be $50,000
• firm's marginal tax rate is 32%
• required return on the project is 12% compounded annually

What is the profitability index of the above project?

What is the payback period of the above project?