Evaluation and Technique - Profitability Index Flashcards Preview

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Flashcards in Evaluation and Technique - Profitability Index Deck (1)
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1
Q

Profitability Index

A

Concerned with ranking projects (cost-benefit ratio) takes into account NPV of project and cost of project;

PI = NPV or project inflows/PV of project cost

Higher the percentage = Higher the risk

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