The correct answer is A. Payback period method.
The payback period is the amount of time it takes for an investment to recover its initial cost. It is calculated by dividing the initial cost of the investment by the annual cash flow. The payback period method is a simple and intuitive way to evaluate investments, but it does not take into account the time value of money. This means that it does not consider the fact that money is worth more today than it will be in the future. As a result, the payback period method can be misleading, and it is often not the best way to evaluate investments.
The interest rate method is a more sophisticated way to evaluate investments. It takes into account the time value of money by using a discount rate to calculate the present value of future cash flows. The interest rate method is more accurate than the payback period method, but it is also more complex.
The present value method is another way to evaluate investments that takes into account the time value of money. It calculates the present value of all future cash flows, and then compares that value to the initial cost of the investment. The present value method is more accurate than the payback period method and the interest rate method, but it is also more complex.
The discounted cash flow method is the most sophisticated way to evaluate investments. It takes into account the time value of money, the risk of the investment, and the opportunity cost of the investment. The discounted cash flow method is the most accurate way to evaluate investments, but it is also the most complex.
In conclusion, the return after the pay off period is not considered in case of the payback period method. The payback period method is a simple and intuitive way to evaluate investments, but it does not take into account the time value of money. This means that it does not consider the fact that money is worth more today than it will be in the future. As a result, the payback period method can be misleading, and it is often not the best way to evaluate investments.