Discounted cash flow methods of capital budgeting, including net present value, internal rate of return, and profitability index, are generally considered the best model for long-range capital budgeting decision making.
The accounting rate of return model, or unadjusted rate of return model, is not generally considered the best model for long-range decision making, because it does not incorporate time value of money concepts.
The payback method is not generally considered the best model for long-range decision making, because it does not incorporate time value of money concepts.
The unadjusted rate of return model, or accounting rate of return model, is not generally considered the best model for long-range decision making, because it does not incorporate time value of money concepts.
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