Which of the following methods of evaluating capital investment projects incorporates the time value of money concept?
i.payback period; II)discounted payback period; III)net present value (NPV); IV)internal rate of return
A)I,II,and III only
B)II,III,and IV only
C)III and IV only
D)I,II,III,and IV

Question

Quizplus · Accepted Answer

The discounted payback period, net present value, and internal rate of return all incorporate the time value of money concept by discounting future cash flows to their present value. The payback period, on the other hand, does not consider the time value of money and only calculates the number of years it takes for the initial investment to be recovered.

Which of the Following Methods of Evaluating Capital Investment Projects