Final answer:
The payback method's main weakness is its failure to account for cash flows after the initial investment is recovered, ignoring the time value of money and the present discounted value of such cash flows. Option B.
Step-by-step explanation:
The principal weakness of the payback method for evaluating proposed investments is that it does not consider cash flows that continue after the investment has been recovered. This method focuses solely on determining how quickly an investment will pay for itself, which is known as the payback period.
However, it neglects the present discounted value of future cash flows that occur after the initial investment is recouped. This disregards the time value of money, which is a fundamental principle stating that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.
So Option b is correct.