Which project profitability evaluation method typically does NOT account for the investment tied up in land (an asset that does not depreciate and may be excluded from payback calculations)?

Introduction / Context:
Project screening in process industries uses several profitability measures. Some consider the total capital employed (including land), time value of money, and salvage; others are simplified screening tools. Understanding which methods ignore non-depreciating assets like land helps avoid biased decisions.

Given Data / Assumptions:

• Land typically has no depreciation and may be treated separately.
• We compare standard methods: NPV, DCF-based IRR, accounting ROI, and payback.

Concept / Approach:
The payback period focuses on how quickly initial cash outlay is recovered from net cash inflows. Many simplified payback analyses omit land cost or treat it as recoverable at resale, so it often does not affect the payback calculation. In contrast, NPV and DCF-based approaches include all cash flows and capital employed (including land), discounted over time.

Step-by-Step Solution:
1) Identify what each method counts: NPV/DCF count all costs and benefits by discounting cash flows.2) Accounting ROI generally uses total investment base, frequently including land.3) Payback method frequently excludes land or treats it as fully recoverable, thus not impacting the payback horizon.4) Therefore, the payback method is the one that typically does not account for land investment.

Verification / Alternative check:
Texts in plant design and engineering economy list payback as a crude, non-discounting screen that may omit non-depreciating assets such as land.

Why Other Options Are Wrong:
NPV and DCF IRR: always include all cash flows and investments.
Accounting ROI: uses investment base, usually including land.
Benefit–cost ratio: a discounted measure that includes all costs and benefits.

Common Pitfalls:
Assuming all capital items affect payback equally; ignoring salvage/resale value and time value of money in payback leads to poor comparisons.

Final Answer:
Pay out period (payback period)