Which of the following is a technique for evaluating capital projects that tells how long it will take a firm to earn back the money invested in a project plus interest at market rates?
A) Payback
B) Discounted payback
C) Net present value
D) Profitability index

Question

Quizplus · Accepted Answer

Discounted payback is the technique that evaluates how long it will take for a firm to recover its investment in a project, considering the time value of money by discounting the cash flows at a market interest rate. Unlike the simple payback method, which does not account for the time value of money, discounted payback provides a more accurate reflection of the project's profitability and risk by incorporating the cost of capital.

Which of the Following Is a Technique for Evaluating Capital