Which of the Following Statements Describes the Modified Payback Method

question 1

Multiple Choice

Which of the following statements describes the modified payback method?

• A)We compute how long it takes to recoup the initial investment using undiscounted cash flows.
• B)The method accumulates the present value of future cash flows over time and compares the cumulative value with the salvage value of the capital expenditure.
• C)The method accumulates the absolute value of future cash flows over time and compares the cumulative value with the present value of the capital expenditure.
• D)The year in which the accumulated present value of future cash flows exceeds the initial cash outflow determines the modified payback period.
• E)None of the above describes the modified payback method.

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