- This topic has 1 reply, 2 voices, and was last updated 10 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
-
Posts
-
Mr Moffat,
May you please clarify how we calculate profitability index (for the project)?
Investment / NPV
or
NPV / Investment
Thank you in advance.
It is NPV / Investment (sometimes the examiner uses PV of future flows / investment, but it doesn’t matter which you use – the ranking and therefore the final answer will be the same.)
I do suggest that you watch our free lecture on capital rationing!!
(Our lectures are a complete course for Paper F9 and cover everything you need to be able to pass the exam well.)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.