What Is the Profitability Index of the Boeing 787 Dreamliner

What is the Profitability Index of the Boeing 787 Dreamliner project? The Boeing 787-8 can carry 230 passengers up to 8,200 nautical miles at a cruising speed of mach 0.85. The Dreamliner is more comfortable for passengers because of higher cabin humidity. Boeing completed construction its assembly plant in Everett Washington in December 2007 at a total cost of $7B. Boeing has secured sales of 865 aircraft over the period 2008-2012 for total proceeds of $138.4B ($160M per aircraft) . The cost of building each plane is $140M. Assume that sales (and costs) occur in December of each year. Assume that sales are spread evenly across the five years from 2008-2012. The project cash flows are shown in the table, below. What is the Profitability Index of the project if Boeing's cost of capital is 10%? Calculate the index as of December 1, 2007. Ignore taxes. $$\begin{array} { | c | c | c | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Capital } \\\text { Investment }\end{array} & \begin{array} { c } \text { Annual } \\\text { Sales }\end{array} & \begin{array} { c } \text { Annual } \\\text { Revenues }\end{array} & \begin{array} { c } \text { Annual } \\\text { Costs }\end{array} & \text { Cash Flows } \\\hline 2007 & - \$ 7,000 \mathrm { M } & & & & - \$ 7,000 \\\hline 2008 & & 173 & \$ 27,680 & \$ 24,220 & \$ 3,460 \\\hline 2009 & & 173 & \$ 27,680 & \$ 24,220 & \$ 3,460 \\\hline 2010 & & 173 & \$ 27,680 & \$ 24,220 & \$ 3,460 \\\hline 2011 & & 173 & \$ 27,680 & \$ 24,220 & \$ 3,460 \\\hline 2012 & & 173 & \$ 27,680 & \$ 24,220 & \$ 3,460 \\\hline\end{array}$$

A) -1.52
B) -0.44
C) 1.06
D) 1.87
E) 2.43