The Capital Budgeting Decision Technique That Reflects the Time Value

Multiple Choice

The capital budgeting decision technique that reflects the time value of money and is calculated as the present value of the future after-tax cash inflows divided by the initial cash outlay for the investment is called the:

A) Net present value (NPV) method.
B) Capital rationing method.
C) Average accounting rate of return (ARR) method.
D) Profitability index (PI) method.
E) Present value payback method.