Consider a capital expenditure project to purchase and install new equipment with an initial cash outlay of $30,000. The project is expected to generate net after-tax cash flows each year of $2800 for ten years, and at the end of the project, a one-time after-tax cash flow of $15,000 is expected. The firm has a weighted average cost of capital of 10 percent and requires a 10.5-year payback on projects of this type. Calculate the profitability index for the project.

a. 10.71 years

b. 10.50 years

c. 5.36 years

d. 2.00 years

e. none of the above