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Cardinal Company is considering a five-year project that would require a $2,845,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 12%. The project would provide net operating income in each of five years as follows:

Sales			$	2,869,000
Variable expenses				1,126,000
Contribution margin				1,743,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	709,000
Depreciation		569,000
Total fixed expenses				1,278,000
Net operating income			$	465,000

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table.

5. What is the project profitability index for this project? (Round your answer to 2 decimal places.)

The answer is not 1.31!!!!