Payback period (II) tells the length of time it takes to get initial cash outflow back, that is the period from the initial cash outflow to the time when the investment project’s cash inflows add up to the initial cash outflow. This technique is (III) a simple, easy to use and easy to understand technique. The assumption is that (IV) cash flow occurs at a constant rate throughout the year. The fact that projected cash flows are discounted at an appropriate discount rate and their present values are used to calculate payback period is in effect in discounted payback period technique. The correct answer is E.