Which of the following capital decision methods computes the projects unique rate of return and considers the time value of money?

a. Net present value

b. Internal rate of return

c. Payback method

Which of the following capital decision methods shows the excess or deficiency of the assets present value of net cash inflows over its initial investment cost?

a. Internal rate of return

b. Net present value

c. Payback method

Accept the investment proposal if the net present value of the investment is positive and the company is not under the constraint of capital rationing (shortage of funds).

a. True

b. False