The three main methods of capital budgeting are
A) the weighted average cost of capital (WACC) method, the net present value (NPV) method, and the flow-to-equity (FTE) method.
B) the weighted average cost of capital (WACC) method, the adjusted present value (APV) method, and the debt-to-equity (DTE) method.
C) the weighted average cost of capital (WACC) method, the adjusted present value (APV) method, and the flow-to-equity (FTE) method.
D) the weighted average cost of capital (WACC) method, the adjusted future value (AFV) method, and the flow-to-equity (FTE) method.

Question

Quizplus · Accepted Answer

The three main methods of capital budgeting are the weighted average cost of capital (WACC) method, the adjusted present value (APV) method, and the flow-to-equity (FTE) method. Option A and D are incorrect because there is no method called the flow-to-debt (FTD) or adjusted future value (AFV) methods. Option B is incorrect because there is no widely used method called the debt-to-equity (DTE) method.

The Three Main Methods of Capital Budgeting Are