how to find profitability index while investment required ,npv ,life of the project ,internal rate of return and the discount rate are given
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The profitability index is calculated by dividing the present value of future cash flows that will be generated by the project by the initial cost of the project. A profitability index of 1 indicates that the project will break even. If it is less than 1, the costs outweigh the benefits
How to calculate IRR
Choose your initial investment.
Identify your expected cash inflow.
Decide on a time period.
Set NPV to 0.
Fill in the formula.
Use software to solve the equation
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