The following information is available for a potential capital investment.

Initial investment $80,000

Salvage value 10,000

Net annual cash flow 14,820

Present value of net annual cash flows 98,112

Net present value 18,112

Useful life 10 years

The potential investment's profitability index (rounded to two decimals) is:

a) 5.40.

b) 1.19.

c) 1.23.

d) 1.40.