Difference between revisions of "Profitability Index"
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(Created page with "The ''''Profitabilty Index''''' looks at the ratio of the NPV compared to the initial investment required: <math>{Profitability Index}</math> = <math>\frac{NPV}</math>{{Initi...") |
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Latest revision as of 19:25, 27 August 2020
The 'Profitabilty Index looks at the ratio of the NPV compared to the initial investment required:
= Failed to parse (syntax error): {\displaystyle \frac{NPV}} Template:Initial\ Investment
Compare the following projects:
| Project | NPV at 10% | |||
|---|---|---|---|---|
| A | ||||
| 21 | ||||
| B | ||||
| 16 | ||||
| C | ||||
| 12 |
The profitability index would be:
| Project | Investment | NPV | Profitability Index |
|---|---|---|---|
| A | 10 | 21 | 2.1 |
| B | 5 | 16 | 3.2 |
| C | 5 | 12 | 2.4 |