Question

Discuss any two discounted cash flow techniques of capital budgeting with examples.
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Answer 1

Answer:

CAPITAL BUDGETING TECHNIQUES / METHODS

• 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.

There are a number of capital budgeting techniques available, which include the following:

• Discounted cash flows. ...
• Internal rate of return. ...
• Constraint analysis. ...
• Breakeven analysis. ...
• Discounted payback. ...
• Accounting rate of return. ...
• Real options.