1. Assume that a company is considering a capital investment project with a four-year time horizon and the following cash flows:

   Cost of new equipment	$	190,000
   Working capital required	$	50,000
   Annual net cash inflows	$	100,000
   Maintenance and repairs in third year	$	40,000
   Salvage value of equipment in fourth year	$	30,000

   Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Assuming the companys required rate of return is 17%, the profitability index of the project is closest to:

   		1.17.
   		1.21.
   		1.33.
   		1.22.