Which of the following decision rules is best for evaluating projects for which cash flows beyond a specified point in time, and the time value of money, can both be ignored?
A) Payback.
B) Net present value.
C) Average accounting return.
D) Profitability index.
E) Internal rate of return.

Question

Quizplus · Accepted Answer

The Payback method is best for evaluating projects when cash flows beyond a specified point in time and the time value of money can both be ignored, as it simply measures the time it takes for the initial investment to be repaid by the project's cash inflows, without discounting those cash flows.

Which of the Following Decision Rules Is Best for Evaluating