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24 April, 19:42

In the payback method, depreciation is deducted from net operating income when computing the annual net cash flow.

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  1. 24 April, 19:59
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    This statement would be false. The depreciation is added back to the net income when computing the annual net cash flow in the payback method. The depreciation is a non-cash item therefore it should not be deducted from the net income when computing the cash flow.
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