7. The NPV and payback period What information does the payback period provide? Suppose Acme Manufacturing Corporation's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. Year Cash Flow Year 1 Year 2 Year 3 $375,000 $450,000 $500,000 Year 4 $425,000 If the project's weighted average cost of capital (WACC) is 10%, what is its NPV? $303,748 $349,310 $258,186 $364,498 Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply. The discounted payback period is calculated using net income instead of cash flows. O The discounted payback period does not take the project's entire life into account. O The discounted payback period does not take the time value of money into account