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The Profitability Index

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The well-known net present value (NPV) rule advocates accepting all investment projects that have a positive NPV. The NPV rule makes economic sense since positive-NPV projects are expected to create economic value. But what should a manager do if the total investment capital needed to fund the available positive-NPV projects exceeds the budgeted capital available? This note illustrates and discusses the profitability index, one tool that is used to assist managers in such constrained situations.

【書誌情報】

ページ数:2ページ

サイズ:A4

商品番号:HBSP-UV8023

発行日:2020/3/26

登録日:2020/6/29

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