Which of the following is a correct statement about the discounted payback period (DPB) technique that is used to evaluate capital budgeting projects?
A. To compute a project's DPB, simply add up the unadjusted expected cash flows for each year until the cumulative value equals the amount that is initially invested.
B. According to DPB, a project should be accepted when its discounted payback period is greater than its useful life.
C. The DPB does not provide information about the liquidity of a project.
D. The DPB method considers the time value of money.
E. To compute a project's DPB, its internal rate of return (IRR) must be known.
Answer: D
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