How do you solve salvage value in payback method?

In the payback method, salvage value is typically not included in the calculation, as this method focuses solely on the time it takes for an investment to recoup its initial cost through cash inflows. However, if the salvage value is significant and expected to be realized at the end of the project's life, it can be factored in by adding it to the final cash flow when assessing the total cash inflows. This adjustment may shorten the payback period, but it’s crucial to remember that the payback method does not consider the time value of money or cash flows beyond the payback period.