Profitability Index Calculator
Calculate the profitability index to evaluate investment attractiveness by comparing present value of cash flows to initial cost.
How to Use the Profitability Index Calculator
- Enter present value of future cash flows.
- Enter initial investment.
- Click Calculate.
- Review PI, NPV, and decision.
حالات الاستخدام
- •Capital budgeting
- •Project ranking under constraints
- •Investment selection
الصيغة
PI = PV of Future Cash Flows / Initial Investment
الأسئلة الشائعة
What does PI tell you?
PI greater than 1 means the investment creates value; the higher the PI, the more attractive the project.
How is PI different from NPV?
PI is a ratio (relative measure), while NPV is an absolute dollar amount. PI is useful for ranking projects under capital constraints.
Is this calculator free?
Yes, all calculators are completely free.