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.
Correct Answer:
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