With respect to the capital budgeting practices of large U. S. corporations: the profitability index has been gaining in popularity. IRR and NPV have been gaining in popularity. payback and discounted payback have been gaining in popularity. IRR and NPV have declined in popularity.

with respect to the capital budgeting practices of large U.S. corporations, NPV and IRR have been gaining in poularity.

Hence statement B is correct

NPV compares the present value of future cash flows with the present value of cash outflows to assess if the project is profitable to pursue discounted at the cost of capital of the firm.

IRR is the similar technique which equates the present value of cash inflows with the present value of outflows dicounted at the rate of return required by the company which includes the cost of capital along with the earning rate required on the project.

Statement A is false, as PI is defined as the benefits per rupee invested in the proposals. PI faces the same shortcomings as the NPV and hence IRR is a better tool which is gaining popularity

Statement C is false, payback period examines the number of years taken by cash inflows to equal to outflows. It igores the time value of money and hence not popular. Discounted payback is the combintion of pay back period and NPV but its limitation is that it still does not take into account those cash flows which occur subsequent to payback period and may be substantal.

Statement D is false, as the statement is not true, NPV and IRR are not declining popularity rather gaining popularity

Hence statement B is correct.