Compare the capital budgeting methods (Learning Objective 5)

Fill in each statement with the appropriate capital budgeting method: payback period, ARR, NPV, or IRR.

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a. b. c. d. e. and incorporate the time value of money. focuses on time, not profitability. uses accrual accounting income. finds the discount rate that brings the investment's NPV to zero. In capital rationing decisions, the profitability index must be computed to com- pare investments requiring different initial investments when the. method is used. f. g. return. h. - ignores salvage value. uses discounted cash flows to determine the asset's unique rate of highlights risky investments. measures profitability but ignores the time value of money.