Profitability index method - benefit cost ratio, Financial Management

Do you guys provide Profitability Index Method assignment help? I need writing a report on Profitability Index Method and it is about 2000 words. Let me know. I need to buy your solution.

Posted Date: 2/14/2013 12:59:17 AM | Location : United States





Profitability Index Definition:

A ratio of discounted cash inflow to the discounted cash outflow is known as Profitability Index. Discounted cash inflow is our advantage in the project and the initial investment is our cost, which is why we as well call it benefit to cost ratio.

Profitability Index Method

The method utilized for arriving at profitability index of a proposed project is described step wise below:

a) Determine the expected cash inflows of the project

b) Determine the cash outflows of the project (Initial Investment + any other cash outflow)

c) Decide a suitable discount rate

d) Discount the expected cash inflows by using the discount rate

e) Discount the future cash outflows and add to initial investment

f)  Divide step (d) by step (e)

Posted by Harry | Posted Date: 2/14/2013 1:00:10 AM


Related Discussions:- Profitability index method - benefit cost ratio, Assignment Help, Ask Question on Profitability index method - benefit cost ratio, Get Answer, Expert's Help, Profitability index method - benefit cost ratio Discussions

Write discussion on Profitability index method - benefit cost ratio
Your posts are moderated
Related Questions
What does an inventory turnover of 3.0 suggest? If inventory is sold for cash instead of on credit, how will this affect the inventory turnover? If a fi s inventory turnover is 4.0

How does the net present value relate to the value of the firm? The net present value (NPV) is the dollar amount of the change to the value of the organization if the project wit

Six years ago . the singleton company sold a 20 year bond with a 14% annual coupon rate and a 9% call premium. today, singleton called the bonds. the bonds originally were sold at

What are the Reasons why organisations grow Required to provide higher financial returns to investors e.g. increases the wealth of shareholders Possible to achieve econ

Board should encourage a strong control culture. Manager's bonus must not only be linked to company profits but also linked to internal control procedures being adhered to. There m

Identification the management risk: The first and most essential aspect of risk management is recognising what events may occur within a business.  It is only when all the poss

This task must be completed in order from 1 to 11 as identified in both the Income Statement and the Balance Sheet. In addition, all answers must cite relevant supporting formulas

Q. Evaluate Cost of Irredeemable Debt subsequent to tax? Cost of Irredeemable Debt subsequent to tax: - When a company utilizes debt as a source of finance then it saves a cons

Q. How Amount of financing affecting cost of capital? Amount of financing as the financing require of the firm become larger , the weighted cost of capital increased several re

Q. Can you explain about Finance function? Finance function is the most important function of the all business function. It remains a focus of the all activity. It is not possi