Which of the following capital budgeting techniques ignores the time value of money?
A) payback period approach
B) net present value
C) internal rate of return
D) profitability index

Question

Quizplus · Accepted Answer

The payback period approach only considers the time it takes to recover the initial investment and is based purely on cash flows, without taking into account the time value of money. The other techniques, net present value, internal rate of return, and profitability index all consider the time value of money by discounting future cash flows.

Which of the Following Capital Budgeting Techniques Ignores the Time