Which of the following is NOT a criterion for evaluating capital projects?

The criterion that is not typically used for evaluating capital projects is the liquidity ratio. Capital project evaluation focuses primarily on assessing the potential profitability and financial returns of long-term investments. Criteria such as net present value (NPV), profitability index, and internal rate of return (IRR) are specifically designed to evaluate the financial viability and efficiency of these investments by taking into account factors like cash flow, time value of money, and return on investment.

The liquidity ratio, however, measures a company's ability to meet its short-term obligations and assesses financial health in terms of the availability of cash or assets that can be quickly converted into cash. While liquidity is certainly important for a company's overall financial health, it is not a direct measure of the effectiveness or potential success of a specific capital investment. Hence, it does not serve as a criterion for evaluating capital projects.