Which methods of evaluating a capital investment project use cash flows as a measurement basis?
A)Net present value,accounting rate of return,and internal rate of return.
B)Internal rate of return,payback period,and accounting rate of return.
C)Accounting rate of return,net present value,and payback period.
D)Payback period,internal rate of return,and net present value.
E)Net present value,payback period,accounting rate of return,and internal rate of return.

Question

Quizplus · Accepted Answer

Net present value (NPV), internal rate of return (IRR), and payback period methods all use cash flows as the basis for evaluating capital investment projects. The accounting rate of return (ARR) method, on the other hand, is based on accounting income and not cash flows.

Which Methods of Evaluating a Capital Investment Project Use Cash