Can you please state why the profitability index is used to? Is it true that it is used for capital rationing questions which is helpful in ranking the project to prefer?
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Profitability Index
5y ago#1It is used when there is capital rationing and the projects are infinitely divisible.
This is all explain in my free lectures on capital rationing. The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
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