For each of the statements, indicate which capital budgeting accounting method applies. More than one method may be used for a given item.

P = Payback

ARR = Accounting rate of return

IRR = Internal rate of return

NPV = Net present value

a. Assumes that funds are reinvested at the company’s cost of capital

b. Assumes that funds are reinvested at the project’s rate of return

c. Projects that have a positive net monetary amount should be accepted

d. Does not consider the time value of money

e. Does not necessarily include total project cash flows

f. Considers the time value of money

g. Not affected by the timing of the cash flows and directly includes depreciation in the computation