Profitability Index

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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February 12, 2021 at 4:15 pm #610172
Faizahmad1009
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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?
February 13, 2021 at 9:05 am #610206
John Moffat
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It 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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