The profitability index technique is most meaningful when a project has only one cash outflow which occurs at its beginning, and that is followed by a series of inflows that are constant in amount and regular in time.

Profitability Index

A financial metric used to evaluate the desirability of an investment or project, calculated as the present value of future cash flows divided by the initial investment cost.

Cash Outflow

The total amount of money being spent by a business, including expenses, investments, and any other payments.