Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return.

Learn how to calculate the net present value (NPV) of your investment projects using Excel's XNPV function.

Find out more about return on equity, the formula to calculate ROE, and how to calculate this measure of corporate profitability in Microsoft Excel.

How to Calculate the Profitability Index To calculate the profitability index, you first need to determine the present value of the expected future cash flows from the investment.

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money.