Final answer:
The problem with payback period that is not a problem with discounted payback is that cash flows beyond the payback year are ignored. Other issues such as rejecting worthwhile long-lived projects, arbitrary cut-off periods, and accepting negative net present value projects are problems with both payback and discounted payback.
Step-by-step explanation:
The problem with payback period that is not a problem with discounted payback is that cash flows beyond the payback year are ignored. In payback period analysis, only the time it takes to recoup the initial investment is considered, while discounted payback takes into account the time value of money by discounting future cash flows. The other options listed - worthwhile long-lived projects may be rejected, the cut-off period is arbitrary, and negative net present value projects may be accepted - are all valid problems with both payback and discounted payback.