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Profitability Index Calculator

Find an investment's profitability index.

How to use

  1. Enter your values in the fields above.
  2. Press Calculate to see your result instantly.
  3. Use the Share button to copy a link to your result.

About this calculator

The profitability index (PI = present value of future cash flows ÷ initial investment) restates net present value as a ratio rather than a dollar amount: PI = 1 + NPV/investment, so any project with PI above 1 has a positive NPV and is theoretically worth pursuing. Because it's normalized per dollar invested, PI lets you compare projects of very different sizes on equal footing.

Corporate finance teams and capital-budgeting analysts use the profitability index specifically when capital is rationed — when there isn't enough budget to fund every project with positive NPV — ranking candidates by PI to find the combination that maximizes total value for a limited investment pool. It's a standard tool alongside NPV and IRR in MBA finance courses and corporate investment-committee decision packs.

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