Question

A capital budgeting technique that explicitly incorporates an estimated interest rate into its basic computations is

Answer 1

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❏Capital budgeting consists of various techniques used by managers such as:

• Payback Period.
• Discounted Payback Period.
• Net Present Value.
• Accounting Rate of Return.
• Internal Rate of Return.
• Profitability Index.

Answer 2

Answer:

net present value method

Explanation:

Net present value is a tool of Capital budgeting to analyze the profitability of a project or investment. It is calculated by taking the difference between present value of cash inflows and present value of cash outflows.

Net present value is nothing but net off of the present value of cash inflows and outflows by discounting the flows at an estimated rate.