Which of the following capital budgeting techniques may potentially ignore part of a project's relevant cash flows?

Question

Quizplus · Accepted Answer

The payback period technique may potentially ignore part of a project's relevant cash flows as it only considers the length of time required for the initial investment to be recovered and ignores any cash flows beyond this point. Net present value, internal rate of return, and profitability index take into account all relevant cash flows.

Which of the Following Capital Budgeting Techniques May Potentially Ignore