Which of the following are two methods of analyzing capital investment proposals that both ignore present value?

A. Internal rate of return and average rate of return
B. Net present value and average rate of return
C. Average rate of return and cash payback
D. Internal rate of return and net present value



Answer :

Final answer:

Two methods that ignore present value in capital investment analysis are the average rate of return and cash payback.


Explanation:

Average rate of return and cash payback are two methods of analyzing capital investment proposals that both ignore present value.

The average rate of return method calculates the average annual profit as a percentage of the initial investment and disregards the time value of money. Similarly, the cash payback method focuses on the time it takes to recoup the initial investment without considering the present value of future cash flows.


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