Ch. 21:

Capital Budgeting Methods:

1. What four capital budgeting methods were introduced in this chapter? Which two do not consider the time value of money? Which two do consider the time value of money? What does the "time value of money" mean?

2. Describe the accrual accounting rate-of-return method in your own words. What is the formula used? What are the main strengths and weaknesses of this method?

3. Describe the net present value method in your own words. Briefly describe the process used (steps) to find the net present value. What are its main strengths and weaknesses of this method?

• please provide sources