1. Table 1. Capital budgeting methods, recommended or not by textbooks
a) Net present value (NPV)
Recommended
b) Internal rate of return (IRR)
Not recommended
c) Annuity
d) Earnings multiple (P/E)
e) Adjusted present value (APV)
f) Pay-back
g) Discounted pay-back
h) Profitability index
i) Accounting rate of return (ARR)
j) Sensitivity analysis
k) Value-at-risk (VAR)
l) Real options
Sven-Olov Daunfeldt et al. What Determines the Use of Capital Budgeting Methods? Evidence from Swedish Listed Companies. Journal of Finance and Economics, 2014, Vol. 2, No. 4, doi: /jfe-2-4-1
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