alleryStart learning →Which two methods are described as non-time value evaluative methods?
AARR and IRR
BPayback and ARR
CNPV and IRR
DPayback and NPV
Answer & Solution
Correct answer: B. Payback and ARR
1. The four methods divide into two families.
2. Some methods account for the time value of money and some do not.
3. Two non-time value evaluative methods are named.
4. They are the payback method and the accounting rate of return.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 11 'Capital Budgeting Decisions'_
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Complete the capital budgeting rulesMatch each capital budgeting methodStack the capital budgeting termsSort the capital budgeting methodsPull the rope to the right method familyChoosing a project on payback alone risks favouring one that repays quickly but earns:Of the four named methods, how many account for the time value of money?The payback method's focus on recouping an investment makes it primarily a measure of: