The payback and accounting rate of return models are conceptually better than the discounted cash flow models because they are based on cash flows, and they consider both profitability and the time value of money.

Question

Quizplus · Accepted Answer

The statement is incorrect. The payback and accounting rate of return models are not conceptually better than discounted cash flow models, as they do not consider all future cash flows and do not incorporate the time value of money as accurately. Discounted cash flow models, such as net present value and internal rate of return, are considered the superior methods of investment analysis.

The Payback and Accounting Rate of Return Models Are Conceptually