The discounted cash flow methods for capital budgeting are generally considered inferior to the payback period and the ARR because they consider the time value of money.

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Discounted cash flow methods, such as net present value and internal rate of return, are considered superior to payback period and accounting rate of return because they take into account the time value of money. By contrast, payback period and accounting rate of return do not consider the time value of money, so they may not provide an accurate measure of a project's profitability or value.

The Discounted Cash Flow Methods for Capital Budgeting Are Generally