Present value index
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Present value index is an index that computes the number of dollars returned for every dollar invested, with all calculations performed in present value dollars. It is computed as present value of net cash inflows divided by investment; also called profitability index.
Definitions
According to Managerial Accounting by Braun, Tietz (5th edition),
- Present value index. An index that computes the number of dollars returned for every dollar invested, with all calculations performed in present value dollars. It is computed as present value of net cash inflows divided by investment; also called profitability index.
