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What's the Profitability Index (PI) and How Is It Calculated?
The formula for the profitability index is: PI = Present Value of Future Cash Flows / Initial Investment. PI can offer you several advantages when evaluating investment opportunities. Here are ...
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What Are the Pros and Cons of the Profitability Index (PI)?
It’s calculated using the following formula: Profitability Index = Present Value of Future Cash Flows ÷ Initial Investment A PI greater than one indicates that the project’s PV exceeds its ...