Attempts 6. The payback period Keep the Highest/4 The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc. Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Delta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you compute the project's payback period using the following expected net cash flows and assuming that the cash flows are received evenly throughout each year. Complete the following table and compute the project's conventional payback period. For full credit, complete the entire table. (Note: Round the conventional payback period to two decimal places. If your answer is negative, be sure to use a minus sign in your answer) Expected cash flow: Year 0 -$6,000,000 Year 1 $2,400,000 Year 2 $5,100,000 Year 3 $2,100,000 Cumulative cash flow 16 Conventional payback period: years The conventional payback period ignores the time value of money, and this concems Cold Goose's CFO. Ha has now asked you to compute Delta's discounted payback period, assuming the company has a 7% cost of capital. Complets the following table and perform any necessary calculations Nound the discounted cash flow values to the nearest whole dollar, and the discountedantack paced in ten decimal places forladt, completa conventional payback period to two decimal places. If your answer is negative, be sure to use a minus sign in your ar Expected cash flow Year -$6,000,000 Year 1 $2,400,000 Year 2 15,100,000 Year 3 $2,100,000 Cumulative cash flow Conventional payback period: The conventional payback period ignores the time value of money, and this concerns Cold Goose's CFQ. He has new asked you to compute Des discounted payback period, assuming the company has a 7% cost of capital. Ciampiets the following table and perform any necessary Round the discounted cash flow values to the nearest whole dolar, and the disunted payback period to two decimal places. For full credit, comp the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answ Cash flow Year -$6,000,000 Year 1 Year 2 Year 3 $2.400,000 $5.100.000 $2,100,000 Discounted cash flow S Cumulative discounted cash flow L Oscounted payback period which version of a project's payback period should the CFD use when evaluating Pet Deita, given its theoretxa t O The regular payback pend The discounted payback period One theoretical disadvantage of both payback methode-compared to the net prevent dows beyond the point in time equal to the payback pe Year 0 Cash flow $6,000,000 Year 1 $2,400,000 Year 2 Year 3 $5,100,000 $2,100,000 Discounted cash flow $ Cumulative discounted cash flow S Discounted payback period years Which version of a project's payback period should the CFO use when evaluating Project Delta, given its theoretical superiority? O The regular payback period O The discounted payback period One theoretical disadvantage of both payback mathods-compared to the net present value method-is that they fail to consider the value flows beyond the point in time equal to the payback period How much value in this example does the discounted payback period method fail to recognize due to this theoretical deficiency? $3,957,237 O $2,411,755 $1,714,226 16,168,764 the cash