Required information

The Foundational 15 [LO13-1, LO13-2, LO13-3, LO13-5, LO13-6]

[The following information applies to the questions displayed below.]

Cardinal Company is considering a five-year project that would require a $2,855,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 14%. The project would provide net operating income in each of five years as follows:

Sales			$	2,867,000
Variable expenses				1,125,000
Contribution margin				1,742,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	706,000
Depreciation		571,000
Total fixed expenses				1,277,000
Net operating income			$	465,000

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