Profitability Index Calculator

Your details

Choose "PV already known" if you have the present value of future cash flows. Choose "Enter annual cash flows" to let the calculator discount each year for you.
The upfront capital outlay required to start the project, entered as a positive number.
The sum of all future cash flows already discounted back to today.
Currency
Profitability IndexAccept
1.2

PI = PV of future cash flows / Initial investment. Above 1.0 means value is created.

PV of future cash flows$120,000.00
Net Present Value$20,000.00
DecisionAccept - creates value
1.2
Reject (< 1.0)<1Marginally viable1-1.5Good1.5-2Excellent2+

PI of 1.2000: this project creates value and passes the PI hurdle.

  • For every dollar invested, this project returns 1.20 dollars in present-value terms.
  • The project generates a positive NPV of $20,000, meaning it adds more value than it costs.
  • The total present value of future cash flows is $120,000, compared to an initial outlay of $100,000.

Next stepWhen comparing multiple projects, choose the one with the highest PI first to maximize value per dollar of scarce capital.

 = Powered by OnlyCalculators