The traditional payback period technique that is used in capital budgeting analyses:
A. is the simplest and oldest formal method used to evaluate capital budgeting projects.
B. directly accounts for the time value of money.
C. considers the discounted value of cash flows beyond the project's payback period.
D. always results in maximizing the value of the firm when used to evaluate mutually exclusive projects.
E. incorporates risk into the discount rate that is used to compute the payback period.
Answer: A
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