The method that compares the present value of a project's future cash flows to the initial investment is:

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The method that compares the present value of a project's future cash flows to the initial investment is net present value. It factors in the time value of money and provides a single dollar amount for the profitability of the project. Accounting rate of return and payback period do not consider the time value of money and therefore may not provide an accurate picture of profitability. Internal rate of return is a useful method but can be less accurate than net present value if there are non-conventional cash flows.

The Method That Compares the Present Value of a Project's