It shows how much profit is generated per unit of investment. Project Profitability Index DefinedĪ profitability index (PI) provides a way for business owners and managers to determine a particular project’s profitability. We’ll also discuss how to interpret the results, so you’ll be able to make more informed decisions for your company. This article will discuss what the profitability index is, why it matters, and how to calculate it. Many companies calculate the project profitability index to help them decide which projects to pursue.
But how do you know which project will produce the greatest gains for your company? While some may become a success, others may not turn out exactly how you wanted it. The problem is, not every project is created equal.
As a business owner, you’ll want all of your planned projects to succeed.