How do i write when the PI is less than 1 at 0.94? ...
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How do i write when the PI is less than 1 at 0.94?
Example:
When the PI is 1.003 = it can be seen that the project will create an additional value of $1.003 for every $1 invested in the project.
B6 fox =B4/B5 A PV of Future Cash Flows 1 PV of cash flow in Year 1 Initial Investment 2 PV of cash flow in Year 2 2,479 3 PV of cash flow in Year 3 $ 3,005 4 Sum of PV of future Cash Flow $ 10,029 5 Initial Investment $ 10,000 6 Profitability Index of the Project 1.003 7 As per the formula of the profitability index, it can be seen that the project will create an additional value of $1.003 for every $1 invested in the project. Therefore, the project is worth investing since then it is more than 1.00
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