All of the following capital budgeting models incorporate the time value of money except:
A) The payback method.
B) The modified internal rate of return (MIRR) method.
C) The profitability index (PI) method.
D) The discounted payback method.
E) The internal rate of return (IRR) method.

Question

Quizplus · Accepted Answer

The payback method does not incorporate the time value of money as it only considers the number of years it takes to recover the initial investment, without discounting future cash flows.

All of the Following Capital Budgeting Models Incorporate the Time