The correct answer is: C. Present value of future earning model.
The present value of future earning model is a method of HR accounting that values human capital based on the present value of future earnings. This model assumes that employees are assets that generate future earnings for the company, and that the value of these earnings can be estimated using financial techniques such as discounted cash flow analysis.
The other options are incorrect because:
- The capitalisation of historical cost model values human capital based on the historical cost of hiring and training employees.
- The opportunity cost model values human capital based on the opportunity cost of not using the resources that are used to hire and train employees.
- The replacement cost model values human capital based on the cost of replacing employees.
The present value of future earning model is the most widely used method of HR accounting. It is a relatively simple and straightforward method that can be used to value human capital in a variety of settings. However, it is important to note that the present value of future earning model is based on a number of assumptions, and the accuracy of the model’s results will depend on the accuracy of these assumptions.