One reason why the accounting methods are used to evaluate capital projects is that they take into consideration the fact that money has a time value.

Question

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Accounting methods, such as the payback period or accounting rate of return, do not take into account the time value of money. Techniques like Net Present Value (NPV) or Internal Rate of Return (IRR) are used for considering the time value of money in evaluating capital projects.

One Reason Why the Accounting Methods Are Used to Evaluate