What type of models measure the financial returns of a project, including payback period and IRR?

The correct choice is based on the role that profit or profitability-based models play in evaluating the financial returns of a project. These models focus specifically on quantifying the financial aspects of a project, which includes calculating metrics such as the payback period and the Internal Rate of Return (IRR).

The payback period measures how long it takes for an investment to recoup its initial cost, while IRR represents the annualized effective compounded return rate that makes the net present value (NPV) of all cash flows from the project equal to zero. By using these financial metrics, decision-makers can assess the viability and potential profitability of a project before committing resources.

This focus on financial return differentiates profitability-based models from qualitative models, which address non-numerical factors affecting project success, and operational models that emphasize the mechanisms of project management rather than fiscal returns. Time-based models, while relevant in certain contexts, do not specifically encapsulate the financial analysis aspects, narrowing down the choice to those that focus primarily on monetary assessments.