Profitability index - Revision history

imported>Doug Williamson: Layout.

2022-06-13T12:23:39Z

Layout.

← Older revision		Revision as of 12:23, 13 June 2022
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	(PI).		(PI).

	''Investment appraisal''		''Investment appraisal.''

	The profitability index of a project or other proposed investment may be represented by the following formula:		The profitability index of a project or other proposed investment may be represented by the following formula:

imported>Doug Williamson: Add alternative name - source - CFI - https://corporatefinanceinstitute.com/resources/knowledge/finance/benefit-cost-ratio-bcr/

2022-06-13T12:23:15Z

Add alternative name - source - CFI - https://corporatefinanceinstitute.com/resources/knowledge/finance/benefit-cost-ratio-bcr/

← Older revision		Revision as of 12:23, 13 June 2022
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	Calculated on this basis, projects with a PI > 1 are acceptable.		Calculated on this basis, projects with a PI > 1 are acceptable.


			The profitability index is also sometimes known as the ''Benefit-Cost Ratio (BCR).''

imported>Doug Williamson: Add links.

2022-02-08T09:04:30Z

Add links.

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 == See also ==
 * [[Capital rationing]]
 * [[Present value]]

imported>Doug Williamson: Classify as investment appraisal.

2016-04-11T21:27:04Z

Classify as investment appraisal.

← Older revision		Revision as of 21:27, 11 April 2016
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	(PI).		(PI).

	The profitability index may be represented by the following formula:		''Investment appraisal''

			The profitability index of a project or other proposed investment may be represented by the following formula:

	Profitability index = PV/Co		Profitability index = PV/Co

imported>Doug Williamson: Add alternative calculation.

2016-04-11T21:24:41Z

Add alternative calculation.

← Older revision		Revision as of 21:24, 11 April 2016
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	~~Projects~~ with a PI > 1 are acceptable.		Calculated on this basis, projects with a PI > 1 are acceptable.


			==Alternative definition==

			The profitability index may also be represented by the following alternative formula:

			Profitability index = NPV/Co

			Where:

			NPV = net present value of all positive and negative cashflows, including the initial investment outflow Co


			When defined on this alternative basis, the minimum threshold of acceptability becomes a profitability index of 0.

imported>Doug Williamson: Spacing 21/8/13

2013-08-21T11:55:46Z

Spacing 21/8/13

← Older revision		Revision as of 11:55, 21 August 2013
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	(PI). The profitability index may be represented by the following formula:		(PI).

			The profitability index may be represented by the following formula:

	Profitability index = PV/Co		Profitability index = PV/Co

	Where:		Where:

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

	Co = the absolute value of the initial investment.		Co = the absolute value of the initial investment.


	Projects with a PI > 1 are acceptable.		Projects with a PI > 1 are acceptable.


	== See also ==		== See also ==
	* [[Capital rationing]]		* [[Capital rationing]]
	* [[Present value]]		* [[Present value]]

imported>Doug Williamson: Change "is" to "may be".

2013-06-15T06:57:26Z

Change "is" to "may be".

← Older revision		Revision as of 06:57, 15 June 2013
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	(PI). The profitability index is represented by the following formula:		(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]]

imported>Administrator: CSV import

2012-10-23T14:20:28Z

CSV import

New page

(PI). The profitability index is 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 ==
* [[Capital rationing]]
* [[Present value]]