ABSTRACT
According to the State of Alaska, the use of the pro”tability index method serves as a tool through which energy initiative decisions may be evaluated.† Similar observations are provided by the U.S. Department of the
Interior regarding the initiatives of its Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). According to the BOEMRE, the use of the pro”tability index contributes toward the “physical and economic performance measures to characterize lease sales and development in the U.S. Gulf of Mexico” through quantitative lease analysis.* Other energy uses of the PI method are not uncommon. e PI method also is applicable among the capital initiatives of green energy. Chabot, Kellet, and Saulnier use the PI method as a tool through which evaluations of the French wind system occur.†
e PI method also is useful within the domains of banking and ”nance. Knight examines ”nancial comparisons among loans, and considers the rate e¡ects regarding changes in pro”tability indices. According to Knight, such pro”tability indices would rise accordingly in conjunction with increases among interest rates.‡ is observation is associated with perceptions of trade -o¡ characteristics among di¡erent loans.
