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Write down the various capital budgeting models. In financial modeling with spreadsheet?
How is the Profitability Index (PI) used?
The Profitability Index (PI) is a capital budgeting model that measures the ratio of present value of cash inflows to the present value of cash outflows. PI is used to identify and rank investment projects based on their profitability, and to compare them to other investment opportunities with different cash flows and discount rates.