which of the following evaluation technique for long term investment decision doesn't consider the time value of money
NPV
IRR
Pay back period
Profitability index
Answers
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Payback period
Explanation:
- Payback period is the period or the time which the project takes in order to repay the initial investment to the business. It is measures in terms of months or years.
- The one which does bot consider the time value of money is the payback method as no present value or the IRR computations are performed. And it only consider the cash inflows until the cash outflows are recovered.
- The cash inflows after the period of the payback are not part of the analysis.
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Answer:
the correct option for the given question is option 2
i.e.
IRR
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