The Discounted Payback Period method is a modified payback period model that considers how long it takes to recover the initial investment in current dollars.

Question

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The statement correctly describes the Discounted Payback Period method as a modification of the payback period model that takes into account the time it takes to recoup the initial investment in current (i.e., discounted) dollars. This is achieved by discounting the cash flows and accumulating them until they equal the initial investment.

The Discounted Payback Period Method Is a Modified Payback Period