It is used to select projects under conditions of limited capital
economics
Description
Discounted Profit to Investment Ratio is a dimensionless ratio obtained by dividing net present value (NPV) by the investment
• It is used to select projects under conditions of limited capital
• The decision rule is to maximize the ratio
• DPIR is the amount of Net Present Value Profit generated per discounted investment dollar
• Remember though, - no need to discount if all investment happens at time 0!!
