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
Q. Estimation of Working Capital? A firm must estimate in advance as to how much net working capital will be required for the smooth operations of the business. Only then, it c

Q. Show the Graphic Presentation of Net Income Approach? Graphic Presentation of Net Income Approach: - Net Income approach is described graphically as follows: In the

Restatement of investment appraisal In the following solution the tax allowances in relation to the initial outlay on equipment are evaluated separately. Other approaches are a

In addition to the public pension plans, Rob and Ellen also have RRSPs.  What options will they have when they retire if they want to draw money from their RRSPs?  Identify one str

Do mergers result in layoffs? Whole employment in the banking industry in fact has increased slightly over the last ten years. A few mergers do result in layoffs. Though, many ba

Finance companies Finance companies make loans to individuals as well as corporations by providing consumer lending business lending also mortgage financing. A few of their loa

What happens when a bank charges discount interest on a loan? When a bank charges reduction in interest on a loan the required interest payment is subtracted from the loan proc

Definition of 'Hedge Fund': An aggressively managed portfolio of investments that uses advanced investment strategies define as leveraged, short, long and derivative positions

what is the major value of the weighted cost of capital calculation for the firm?

Explain the term StakeHolders The range of stakeholders may comprise directors/managers, lenders, shareholders, employees suppliers and customers. These groups are probable to