Tag Archives: NPV

  • Profitability Index (PI)

    Posted on October 21, 2011 by admin in Corporate Finance.

    Profitability index refers profitability of the project based on the initial investment. It is calculated as the present value of all the future cash flows from a project divided by the initial investment. Profitability Index = (Present Value of all the future cash flows/Initial Investment) Now we know that NPV = -CF0 + Present Value […]

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