The methods of evaluating capital investment proposals can be grouped into two general categories referred to as (1) the average rate of return and (2) the cash payback methods.

Question

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The methods of evaluating capital investment proposals are generally grouped into two categories: (1) non-discounting methods such as the payback period and accounting rate of return, and (2) discounting methods such as the net present value (NPV) and internal rate of return (IRR).

The Methods of Evaluating Capital Investment Proposals Can Be Grouped