Sir in MTQ 129 NB co there is a small thing I want to ask that as we know that for calculating profitability index we divide NPV by initial cost. But in MTQ 129 in solution they are dividing (NPV + initial cost) by initial cost. Can't we just divide NPV by initial cost?
Similarly in MTQ 140 Guilder co, again in solution they are dividing (NPV + initial cost) by initial cost in order to calculate PI. Can't we just divide NPV by initial cost?
Ask the Tutor ACCA FM
MTQ 129 and 140 Bpp kit
7y ago#1The profitability index can be calculated either way (the number resulting is different, but the decisions remain the same).
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