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profitability index

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › profitability index

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • September 5, 2018 at 7:03 am #471505
    ayeshatabani
    Member
    • Topics: 98
    • Replies: 95
    • ☆☆

    Dear sir,
    When calculating Profitability index both these ways are acceptable right?

    1) NPV/ initial investment

    2)(NPV-initial investment)/intial investment

    Please do correct me if i’m wrong.
    thankyou

    September 5, 2018 at 2:19 pm #471586
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    What you have written is correct except that you should have written PV and not NPV in both cases.

    (PV – initial investment = NPV 🙂 )

    September 5, 2018 at 4:24 pm #471621
    ayeshatabani
    Member
    • Topics: 98
    • Replies: 95
    • ☆☆

    thankyou!

    September 5, 2018 at 6:18 pm #471673
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘profitability index’ is closed to new replies.

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