For each of the capital budgeting methods listed below, place an X in the correct column, indicating the measurement basis of each, the ability to make comparison among projects, and whether each method reflects or ignores the time value of money. ?Measurement BasisComparison among projectsTime value of money?CashflowsAccrualincomeAllowscomparisonDifficulttocompare Reflectstime valueof money Ignorestime valueof moneyPayback period??????Accounting rate of return??????Net present value??????Internal rate ofreturn??????
What will be an ideal response?
| ? | Measurement Basis | Comparison among projects | Time value of money | |||
| ? | Cash flows | Accrual income | Allows comparison | Difficult to compare | Reflects time value of money | Ignores time value of money |
| Payback period | X | ? | X | ? | ? | X |
| Accounting rate of return | ? | X | X | ? | ? | X |
| Net present value | X | ? | X | X | X | ? |
| Internal rate of return | X | ? | X | ? | X | ? |
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Fill in the blank(s) with the appropriate word(s).
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What will be an ideal response?