Question

A capital budgeting method that takes into consideration the time value of money is the cash payback technique. return on stockholders' equity method. internal rate of return method. annual rate of return method.

Answer 1

Answer:

Internal rate of return method

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

Accounting rate of return = Average net income / Average book value

Average book value = (cost of equipment - salvage value) / 2

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash.