Choice "D" is correct. One of the major strengths of the payback method is that it is easy to understand. The payback method takes the total investment in a project and divides it by its annual cash flows to determine the number of years it will take to gain a return of the initial investment. The technique does not consider time value of money concepts.
Choice "c" is incorrect. The payback method does not consider cash flows for the entire project, only the number years it takes to achieve a payback of the investment.
Choice "a" is incorrect. The payback method is a gross method that does not consider the sources of cash inflows.
Choice "b" is incorrect. The payback method does not consider the time value of money.