Profitability index: Difference between revisions
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imported>Administrator (CSV import) |
imported>Doug Williamson (Change "is" to "may be".) |
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(PI). The profitability index | (PI). The profitability index may be represented by the following formula: | ||
Profitability index = PV/Co | Profitability index = PV/Co | ||
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* [[Capital rationing]] | * [[Capital rationing]] | ||
* [[Present value]] | * [[Present value]] | ||
Revision as of 06:57, 15 June 2013
(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.
