Pick up the method used for project evaluation and selection in capital budgeting from the following: A. Payback period B. Internal ratio of return C. Net present worth D. All the above

The correct answer is: D. All the above

Payback period, internal rate of return, and net present worth are all methods used for project evaluation and selection in capital budgeting.

• Payback period is the amount of time it takes for
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  a project to recover its initial investment. It is calculated by dividing the initial investment by the annual net cash flow. A shorter payback period is generally considered to be better.
• Internal rate of return is the rate of return that a project earns on its investment. It is calculated by finding the interest rate that makes the present value of the project’s cash flows equal to zero. A higher IRR is generally considered to be better.
• Net present worth is the difference between the present value of the project’s cash inflows and the present value of its cash outflows. A positive NPV indicates that the project is expected to generate a profit. A negative NPV indicates that the project is expected to lose money.

Each of these methods has its own advantages and disadvantages. Payback period is simple to calculate and understand, but it does not take into account the time value of money. IRR is more accurate than payback period, but it can be difficult

The best method to use for project evaluation and selection depends on the specific project and the company’s objectives. In general, companies use a combination of methods to make their decision.