Gary King is evaluating two new business opportunities. Each of the opportunities shown below has a 15-year life. Gary uses a 12% discount rate.

Option 1 Option 2

Equipment purchase and installation

$71,300 $82,260

Annual cash flow

$28,200 $30,690

Equipment overhaul in year 6

$4,590 -

Equipment overhaul in year 8

- $5,970

Calculate the profitability index of the two opportunities. Which option should he chose?