Capital Rationing Profitability Index Calculator

Rank projects under capital constraints using the Profitability Index: PI = NPV / Initial Investment. Maximizes total NPV when capital is limited and projects cannot be scaled.

Principal ($)
Annual Rate (%)
Years
Compounding / Year
$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.
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How It Works

Rank projects under capital constraints using the Profitability Index: PI = NPV / Initial Investment. Maximizes total NPV when capital is limited and projects cannot be scaled

Each component has a specific meaning:

  • Profitability Index: PI = NPV / Initial Investment — The profitability index: pi = npv / initial investment recorded for the scenario being assessed.

Note: Interpret the capital rationing pi result against the thresholds and context described above.

How to Use

Enter the Profitability Index: PI = NPV / Initial Investment for the scenario you are assessing. Rank projects under capital constraints using the Profitability Index: PI = NPV / Initial Investment. Maximizes total NPV when capital is limited and projects cannot be scaled. Use the capital rationing pi result to inform your calculation.

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Frequently Asked Questions