Discounted cash flow criteria for investment appraisal does not include ___________________.

Net present value

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Benefit-cost ratio

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Accounting rate of return

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Internal rate of return

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Solution

The correct option is B Net present value
There are different methods adopted for capital budgeting. The traditional methods or non discount methods include: Payback period and Accounting rate of return method. The discounted cash flow method includes the NPV method, profitability index method and IRR. Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future.

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(b) Internal Rate of Return	(ii) Compounded values of investments and returns
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