Final answer:
The Net Present Value (NPV) (option d)method assesses capital investments by including both profitability and time value of money, discounting future cash flows to their present value.
Step-by-step explanation:
The capital investment analysis method that includes both profitability and the time value of money to evaluate projects is Net Present Value (NPV). This method involves discounting future cash flows back to their present value using a predetermined discount rate, which represents the cost of capital or required rate of return. The NPV calculates the value added to the firm as a result of undertaking the investment.
When the NPV is positive, the investment is considered to add value to the firm and is typically accepted. Conversely, if NPV is negative, the investment is expected to subtract value from the firm and is usually rejected.