Of the four capital budgeting methods, which ones reflect the time value of money? (Check all that apply).Multiple select question.net present valueaccounting rate of returnpayback periodinternal rate of return
Question
Of the four capital budgeting methods, which ones reflect the time value of money? (Check all that apply).Multiple select question.net present valueaccounting rate of returnpayback periodinternal rate of return
Solution
The capital budgeting methods that reflect the time value of money are:
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
The Accounting Rate of Return (ARR) and Payback Period methods do not take into account the time value of money.
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