Which of the following investment rules does not use the time value of money concept?
A)Net present value
B)Internal rate of return
C)The payback period
D)Profitability index

Question

Quizplus · Accepted Answer

The payback period does not use the time value of money concept since it only considers the length of time required to recoup the initial investment. The other investment rules (net present value, internal rate of return, and profitability index) all take into account the time value of money by discounting future cash flows to their present value.

Which of the Following Investment Rules Does Not Use the Time