Profitability: Profitability Index is defined as the rate of present value of the future cash benefits at the required rate of return to the initial cash outflow of the investment. Decision Rule: If PI > 1 Accept the Project,...
Investors and financial analysts often rely on the profitability index (PI) to determine whether the benefits of an investment opportunity outweigh its costs. Essentially, the PI compares projected cash flows to the initial investment required. A PI greater than one suggests that the project is like...
What is the profitability index of a project that has an initial cash outflow of $600, an inflow of $250 for the next 3 years, and a cost of capital of 10 percent? What is the profitability index of the project that has ...
What is the profitability index for aninvestment with the following cash flows given a 14.5 percent required return? A. 0.94 B. 0.98 C. 1.02 D. 1.06 如何将EXCEL生成题库手机刷题 > 下载刷刷题APP,拍照搜索答疑 > 手机使用 分享 反馈 收藏 举报 参考答案: C 复制 纠错 举一反三 CPU的...
The profitability index (PI), also known as the profit investment ratio (PIR) or value investment ratio (VIR), is a capital budgeting tool that gauges the potential profitability of an investment or project. It can be used as an appraisal technique or applied to potential capital outlays, and...
A profitability index is a method for discerning the relationship between the costs and benefits of investing in a project. If a...
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Along with using the present value index to evaluate the potential of a given investment, businesses can also use this same approach to evaluate the prospects of a particular project. As with securing assets, it is important to make sure all the data considered as part of the calculation is ...
What Is the Profitability Index? The profitability index measures the present value of future expected cash flows and the initial amount invested in a project. The PI, known as the value investment ratio (VIR) or profit investment ratio (PIR), represents the relationship between the costs and b...
As a general rule, an investment with a profitability index ratio equal to or greater than one is considered a potentially profitable opportunity. In other words, if the present value of the after-tax cash flow is equal to or higher than the cost of the investment, the investment may be ...