Asked by Nefetiti Easter on May 14, 2024
Verified
Which methods of evaluating a capital investment project ignore the time value of money?
A) Net present value and accounting rate of return.
B) Accounting rate of return and internal rate of return.
C) Internal rate of return and payback period.
D) Payback period and accounting rate of return.
E) Net present value and payback period.
Time Value of Money
The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.
Capital Investment Project
A project undertaken by a business to acquire or upgrade physical assets such as property, industrial buildings, or equipment to create future benefits.
- Distinguish various techniques for evaluating capital investments and their implementation.
Verified Answer
CC
Christy CmokoMay 16, 2024
Final Answer :
D
Explanation :
Payback period and accounting rate of return ignore the time value of money as they do not take into account the present value of future cash flows.
Learning Objectives
- Distinguish various techniques for evaluating capital investments and their implementation.
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