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In the payback method of Capital Budgeting, we calculate how many years will it take to achieve the break even of investment i.e. in how many years we would be able to recover the full amount invested for the project. Thus, it gives the importance to cashflows which are before the payback period and gives no importance to cashflows after payback period. The major disadvantages of payback period are as follows:

1. No importance to time value of money is given under the Payback Period method.

2. No importance to cashflows which occur after the payback period.

For e.g: If we have invested $1000 in a project A which will generate only $1000 in 1 year would be given preferrence to $500 perpetuity as the payback period of project A is 1 years while the payback period of perpetuity is 2 years. This is because once the payback period is achieved, it doesn't care what happens to the project.

Thus, the statement "One of the shortcomings of the payback method is that it ignores the cashflows after the payback period" is true.

Thus, true option is correct.