The payback, method helps firms establish and identify a maximum acceptable payback period that helos in capital budgeting decisions. There are two versions of the payback method: the correntional payback method and the discuanted parback method.

Which of the following statements indicates a disadvantage of using the traditional paptack period for capital budgeting decislans? Check af that $,$ apply.

The traditional payback period does not take into account the cash flows produced over a project's entire life.

The traditionat papack period does not take into account the the value of money elfects of a projectis cash flows.

The traditional payback period is calculated using net income instead of cash flow.