When computing the profitability index of an investment project, the investment required should exclude any investment made in working capital at the beginning of the project.

Question

Quizplus · Accepted Answer

The investment required in calculating the profitability index should include all initial outlays, including any investment made in working capital at the beginning of the project, as these are part of the total initial costs.

When Computing the Profitability Index of an Investment Project, the Investment