qfinbox.tvm.cashflow.profitability_index

qfinbox.tvm.cashflow.profitability_index(cash_flows: List[float] | ndarray, discount_rate: float) → float[source]

Calculate profitability index for cash flows.

Parameters:

cash_flows (array-like) – Series of cash flows, with initial investment as negative value.
discount_rate (float) – Discount rate (as decimal).

Returns:

Profitability index.

Return type:

float

Examples

>>> cash_flows = [-100000, 30000, 40000, 50000]
>>> profitability_index(cash_flows, 0.10)
1.043