Paulsen Corporation is involved in the evaluation of a new computer-integrated manufacturingsystem. The system has a projected initial cost of P1,000,000. It has an expected life of six years, with...

Paulsen Corporation is involved in the evaluation of a new computer-integrated manufacturing system. The system has a projected initial cost of P1,000,000. It has an expected life of six years, with no salvage value, and is expected to generate annual cost savings of P250,000. Based on Paulsen Corporation’s analysis, the project has a net present value of P57,625. What is the project’s profitability index? (Show your solution)