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DarciXero DarciXero
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3 years ago
The major advantage provided by the profitability index is it

▸ eliminates the need to estimate the firm's cost of capital.

▸ reduces the forecast error of cash flow estimates.

▸ provides a better measure of the effects of a project on shareholder wealth than NPV.

▸ is useful as an aid in raking projects from best to worst.

▸ is easier to calculate than NPV.
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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karlywise05karlywise05
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3 years ago
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DarciXero Author
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3 years ago
Smart ... Thanks!
Ifekwunigwe
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Yesterday
Thanks for your help!!
annabananerz
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2 hours ago
This helped my grade so much Perfect
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