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Profitability Index (PI) = Present Value of Future Cash Flows / Initial Investment. PI > 1 means positive NPV, useful for capital rationing.

Guía paso a paso

  1. 1Calculate PV of future cash flows
  2. 2Divide by initial investment
  3. 3PI > 1 accept, < 1 reject

Ejemplos resueltos

Entrada
PV future CF $120k, initial invest $100k
Resultado
PI = 1.20 (good project, create $0.20 per dollar invested)
Useful when capital limited

Errores comunes a evitar

  • Confusing PI with ROI
  • Not accounting for scale differences

Preguntas frecuentes

When is PI better than NPV?

With capital rationing constraints; allows ranking by efficiency.

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