The profitability index, also known as the profit investment ratio, is a financial metric used to evaluate the attractiveness of an investment or project. It is calculated by dividing the present value of future cash flows by the initial investment cost. A profitability index greater than 1 indicates a potentially profitable investment. This index aids in capital budgeting decisions by comparing the relative profitability of multiple projects.
CMA Prep Course
CMA Exam Academy is a proven, 16-week per part online coaching program to help you pass the CMA. The Academy’s comprehensive curriculum will help you pass the CMA exam and achieve your dreams of earning 6-figures per year, ascend to the executive ranks and earn the respect from your peers.
