The conceptually superior approach to capital budgeting is

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A discounted cash flow method is considered conceptually superior because it takes into account the time value of money and provides a more accurate assessment of the profitability of a project. It also considers cash flows over the entire life of the project, rather than just in the short term, as with the payback method. The annual rate of return method is also flawed because it ignores the time value of money and can lead to incorrect investment decisions.

The Conceptually Superior Approach to Capital Budgeting Is