In capital budgeting, discount factors rather than compound factors are normally used.

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In capital budgeting, discount factors are used to calculate the present value of future cash flows, which helps in assessing the value of an investment by considering the time value of money. Compound factors, on the other hand, are used for calculating the future value of an investment, which is not the primary focus in capital budgeting decisions.

In Capital Budgeting, Discount Factors Rather Than Compound Factors Are