When the firm's budget is limited , then the firm should select the project with the highest PI ratio.
Highest PI ratio ---
The profitability index measures the ratio between the present value of future cash flows and the initial investment. the index is a useful tool for ranking investment projects and showing the value created per unit of investment.
The Profitability Index is also known as the Profit Investment Ratio or the value investment ratio.
The Profitability Index measures the ratio between the present value of future cash flows and initial investment . The index is a useful tool for ranking investment projects and showing the value created per unit of investment.
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