Profitability index

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Revision as of 11:55, 21 August 2013 by imported>Doug Williamson (Spacing 21/8/13)
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(PI).

The profitability index may be represented by the following formula:

Profitability index = PV/Co

Where:

PV = the present value of all the cashflows except the initial investment.

Co = the absolute value of the initial investment.


Projects with a PI > 1 are acceptable.


See also