Profitability Index is the measure of productivity of money means how much do we get for every single unit of money we spend.This is crucial when money is in short supply
Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project
PI is the ratio of present value of Inflow to present value of outflow with cost of capital being used as the discount rate.
Steps in computation:
Step1: Compute Present Value (PV) of Inflow
Step2: Compute PV of Outflow
Step3: PVI / PVO (Step1 / Step2)
If the index is greater than one the project will be selected
Between two project one with higher PI will be selected
Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project
PI is the ratio of present value of Inflow to present value of outflow with cost of capital being used as the discount rate.
Steps in computation:
Step1: Compute Present Value (PV) of Inflow
Step2: Compute PV of Outflow
Step3: PVI / PVO (Step1 / Step2)
If the index is greater than one the project will be selected
Between two project one with higher PI will be selected
I could not have closed on my first home without Mr, Pedro ! Pedro and his team went above and beyond for me on this transaction. He handled my very tight turn around time with ease and was always available for me when I had questions (and I had plenty), even when he was away from the office, which I greatly appreciated! He and his team handled many last-minute scrambles with the seller and worked tirelessly to make sure that I could close before my lease (and my down payment assistance, for that matter) expired. Mr Pedro is an incredibly knowledgeable Loan Officer, courteous, and patient. I went through a couple offers on properties before my final purchase and Pedro was there to help with each one, often coordinating with my agent behind the scenes. I felt supported throughout the entire process. Thanks to Pedro and the tireless efforts of his team, I am now a proud homeowner! I would encourage you to consider Pedro and his loan company for any kind of loan.
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Email- pedroloanss@gmail.com.