Which of the following investment evaluation techniques used in capital budgeting is based on the discounted cash flow model?
A)Accounting rate of return
B)Internal rate of return
C)Payback
D)Both B and C

Question

Quizplus · Accepted Answer

The discounted cash flow model is used in Internal Rate of Return (IRR), which calculates the discount rate that makes the net present value of all cash inflows equal to the initial investment. Accounting rate of return and payback do not use the discounted cash flow model.

Which of the Following Investment Evaluation Techniques Used in Capital