The Spokane Peanut Company needs to upgrade its administrative software package, so it can better manage its supply chain. Spokane has a choice of two software packages.
- Software package 1 will cost Spokane $87,000 to purchase.
- Software package 2 will cost Spokane $98,000 since it has some extras that software package 1 does not.
- Package 1 has a total present value of cash inflows of $99,000
- package 2 has a total present value of cash inflows of $110,000.

Spokane has the money to fund only one of these products and uses the profitability index to make its decisions. Which of the options should Spokane pursue, and why?
a. Spokane should invest in software package 2. Software package 2 has a profitability index of 1.47, whereas software package 1 has a slightly lower profitability index of 1.39.
b. Spokane should invest in software package 1. Software package 1 has a profitability index of 1.22, whereas software package 2 has a slightly lower profitability index of 1.07.
c. Spokane should invest in software package 2. Software package 2 has a profitability index of 1.37, whereas software package 1 has a slightly lower profitability index of 1.17.