How many methods are there in capital budgeting? what are
those.

Answer Posted / shoukatali

There are five methods in Capital Budgeting, those are
following
While the NPV is the rule that always maximise share holder
value, some firms use other criteria for their capital
budgeting decisions, such as:

Net present value

Internal rate of returrn

Profitability index

pay back period

Return on book value

in some cases, the investment decisions resulting from the
IRR and profitability index methods agree with those of
NPV. Decision made using the pay back period and return on
book value methods usually are suboptimal from the stand
point of maximising share holder value.

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