What this calculator does
Profitability index works out value created per dollar invested, for ranking or screening projects. Enter your own figures above and the answer updates as you type: nothing is fixed in the code, so the result reflects exactly the numbers you supply.
The formula this calculator evaluates is printed under the tool and explained below, so you can check the working by hand or reuse it in a spreadsheet.
The formula
FormulaPI = PV of future cash flows ÷ Initial investment
The inputs explained
| Field | What to enter |
|---|---|
| Future cash flows (comma separated, one per year) | A list of numbers, separated by commas or spaces. |
| Discount rate (%) | A number, measured in %. Starts at 10. |
| Initial investment ($) | A number, measured in your currency. Starts at 700000. |
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How the answer changes with discount rate
Every other input is held at the calculator’s starting values while discount rate varies. Select any row to load that scenario into the calculator.
How the answer changes with discount rate
| Discount rate (%) | Profitability index | PV of future cash flows | Verdict |
|---|---|---|---|
| 5 | 1.266 | $886,487.63 | Value-adding (PI > 1) |
| 7.5 | 1.196 | $837,331.57 | Value-adding (PI > 1) |
| 10 | 1.132 | $792,466.36 | Value-adding (PI > 1) |
| 15 | 1.020 | $713,744.59 | Value-adding (PI > 1) |
| 20 | 0.925 | $647,183.64 | Value-destroying (PI < 1) |
| 30 | 0.774 | $541,560.17 | Value-destroying (PI < 1) |