The conceptually superior approach to capital budgeting is
A) a discounted cash flow method.
B) the payback method.
C) the annual rate of return method.
D) none of these.

Question

Quizplus · Accepted Answer

The discounted cash flow method is considered the conceptually superior approach to capital budgeting as it takes into account the time value of money and provides a more accurate measure of the profitability of an investment. The payback method and annual rate of return method do not account for the time value of money, which can lead to inaccurate investment decisions. Therefore, the best choice is A.

The Conceptually Superior Approach to Capital Budgeting Is