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Profitability Index Calculator — result sheet
Compare the present value of project benefits with present value of costs and report the profitability index and value surplus.
Inputs used
Results
Visual chart
Breakdown
Calculation steps
Returned data table
Formula and methodology
Formula: Profitability index = present value of future benefits ÷ present value of investment costs; value surplus = present value of benefits − present value of costs.
Profitability index converts a discounted project comparison into a ratio of benefits to costs. The calculator expects the visitor to supply already-discounted present values; it does not invent a discount rate or cash-flow schedule. An index above one means the entered present-value benefits exceed the entered present-value costs under this scenario.
This result follows the calculator's declared inputs, precision, validation boundaries, and model limits.
Input contract
- Present value of future benefits — currency units; minimum 0; maximum 1000000000000
- Present value of investment costs — currency units; minimum 1.0E-6; maximum 1000000000000
Worked example
| Input | Value |
|---|---|
| Present value of future benefits | 268400 |
| Present value of investment costs | 200000 |
Profitability index = 1.342; present-value surplus = 68,400 currency units.
Assumptions and limits
- Both present-value inputs use the same date, currency, and project boundary.
- Benefits and costs are already discounted to the same present date.
- Present value of costs must be positive so the ratio is defined.
- The value-surplus output is the arithmetic difference and is not a full NPV schedule.
- The ratio does not resolve mutually exclusive projects, scale, risk, timing, or capital constraints.
- Taxes, inflation, financing terms, salvage treatment, and investment advice are not modeled.
Calculator note
Source and methodology
Use the official WorldCalculate methodology policy for the source, formula, precision, and boundary standards behind this calculator.
Planning estimate, not financial, medical, legal, or professional advice. © WorldCalculate — reuse with attribution. Built and curated by Hassan ALRowaie.
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