Profitability Index (Benefit-Cost Ratio) Calculator
How much present value is generated per rupee of capital outlay for ranking competing projects?
Financial Inputs
Corporate hurdle rate or cost of capital.
Profitability Index (PI)
E
Capital Allocation Priority
Tier-1 Priority (PI >= 1.30)
Net Present Value (NPV)
92,27,485
Key Financial Takeaways
- Every ₹100 invested generates ₹137 in present value, creating a net wealth surplus of 36.9% after repaying cost of capital (12%).
Frequently Asked Questions
When should a CFO use Profitability Index instead of NPV?
When an enterprise faces capital rationing (a fixed maximum capex budget and multiple positive-NPV projects), Profitability Index is the superior metric. NPV measures absolute rupee value created, whereas PI measures efficiency per rupee of constrained capital.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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