The primary capital budgeting method that uses discounted cash flow techniques is the

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Discounted cash flow techniques take into account the time value of money and calculate the present value of future cash flows. The net present value (NPV) method subtracts the initial investment from the present value of expected future cash flows to determine whether a project is worth pursuing. Therefore, A is the best choice as it directly uses discounted cash flow techniques. The cash payback technique focuses on the length of time it takes to recover the initial investment, while the annual rate of return method and profitability index use accounting measures of profitability rather than discounted cash flow techniques.

The Primary Capital Budgeting Method That Uses Discounted Cash Flow