Complete the following table and compute the project's conventional payback period. Round the conventional payback period to two decimal places. For negative values, be sure to include a minus sign in your answer.

Year 0 Year 1 Year 2 Year 3

Expected cash flow -5,000,000 $2,000,000 $4,250,000 $1,750,000

Cumulative cash flow $___________ $___________ $___________ $____________

Conventional payback period: ____ years

The conventional payback period ignores the time value of money, and this concerns Cute Camel's CFO. He has now asked you to compute Sigma's discounted payback period, assuming the company has a 9% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For negative values, be sure to include a minus sign in your answer.

Year 0 Year 1 Year 2 Year 3

Cash flow -5,000,000 $2,000,000 $4,250,000 $1,750,000

Discounted cash flow $___________ $___________ $___________ $____________

Cumulative Discounted CF $___________ $___________ $___________ $____________

Discounted payback period: ____ years

Which version of a project's payback period should the CFO use when evaluating Project Sigma, given its theoretical superiority?

A. The regular payback period

B. The discounted payback period

One theoretical disadvantage of both payback methodscompared to the net present value methodis that they fail to consider the value of the cash flows beyond the point in time equal to the payback period.

How much value does thediscountedpayback period method fail to recognize due to this theoretical deficiency?

A. $4,928,461

B. $3,186,183

C. $1,763,323

D. $1,351,321