Choice "A" is correct. The payback method neglects total project profitability. It simply looks at the time required to recover the initial investment; subsequent cash flows are ignored.
Choice "d" is incorrect. Payback does not incorporate the time value of money.
Choice "c" is incorrect. Payback uses cash flow, not accrual accounting income.
Choice "b" is incorrect. The denominator is the annual cash inflows.
