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Weighing the Project's risks against PI to include to or exclude from Investment Package is based on the Corporate Investment Policy.
The model formula
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If this is not the case and the future cash flows include additional investments (for example additional paid in capital and/or capex) then then one need to avoid this metric and chose other methods of assessing the investment profitability, like Present Value Index (PVI) and Modified Internal Rate of Return (MIRR) .
See also
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Economics / Investment / Financial Investment
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