How does the Profitability Index Calculator work?

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

Can you give an example of how to use the Profitability Index Calculator?

Example: Input PV future CF $120k, initial invest $100k gives a result of PI = 1.20 (good project, create $0.20 per dollar invested) (Useful when capital limited).

Is the Profitability Index Calculator free to use?

Yes — completely free with no registration, download, or subscription required. All calculations happen instantly in your browser.

How accurate is the Profitability Index Calculator?

Our Profitability Index Calculator uses verified mathematical formulas and is accurate to multiple decimal places. Results are calculated in real-time using the same methods used by professionals.

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Profitability Index Calculator

Profitability Index

Initial Investment

Year 1 Cash Flow

Year 2 Cash Flow

Year 3 Cash Flow

Discount Rate

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

Difficulty:intermediate

References

›Profitability Index — Wikipedia

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Profitability Index Calculator

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