Identify four capital investment evaluation methods discussed in the chapter and discuss the strengths and weaknesses of each method.

The four capital investment models discussed in the chapter are the cash payback method, the average rate of return method, the net present value method, and the internal rate of return method.​Following are strengths and weaknesses of each:​The cash payback method is easy to understand and is based on cash flows, which are of primary concern to many businesses. However, it ignores profitability and the time value of money.​The average rate of return method measures profitability, but it ignores the time value of money.​The net present value method and the internal rate of return method are both based on cash flows, profitability, and the time value of money. The disadvantages of these two methods are that they have more complex computations and they assume the cash flows can be reinvested at the minimum desired rate of return.