Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project. It is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment. Assuming that the cash flow calculated does not include th...
The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio.
The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio. 
The present value of the future cash flows divided by the initial investment. Also called the benefi
Profitability index, also known as profit investment ratio, is an investment tool that the financial professionals use to determine if an investment should be accepted or not based on the time value of money concept.