A project has an initial investment cost of $20 million. It has projected annual costs of $1 million for each of the first three years, and increasing by $400,000 each year thereafter. There is an additional maintenance cost of $3 million each fourth year (years 4, 8, and 12). The revenue is projected to start at $2 million in year one, increasing by $600,000 annually. Given the discount rate of 8% and a 15 year study period, calculate the Profitability index to determine whether the project is justified

a) 0.98 Justified

b) 0.94 Justified

c) 0.98 Not Justified

d) 0.94 Not Justified