Question: The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decislans. Consider the case of Bue

 The payback method helps firms establish and identify a maximum acceptable
payback period that helps in their capital budgeting decislans. Consider the case

The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decislans. Consider the case of Bue Hamster Manufacturing Incit Blue Hamster Manufacturing Inc is a small firm, and steveral of its manogers are worried about how soon the firm wili be able to recover its initial investment from Project Delta's expected future cash flows. To answer this question, Revie Hamster's cro has asked that wou compute the project's paybsck period using the following expected net cash flows and assumang that the cash flows are roceived evenly throughout each year. Complete the following table and compute the project's comentional paybock period, for full credic, complete the entire table. (Note: Round the conventonal soyback peried to two decimal places. If yeur antwer is negative, be sure to use a minus sign in yoir answec) discounted paybock period, assuming the company has a 10% cost of capital. Complete the foilaeing table and perform arov necersary calcutations. the entirn table. (Note) if your answer b nethetive, be sure to use a minus sign lin your answec) Which version of a project's payback period should the CFO use when evaluating Project Deita, given its theoretical superionity? The regutar payback period The discounted payback period One theoretical disadvantage of both payback methods-compared to the net present value method-is that they fail to consider the value of the cash flows beyond the point in time equal to the payback period. How much vajue in this example does the discounted poyback period method fail to recognize due to this theoretical deficiency? $5,792,637$1,974,455$3,759,579$1,577,761

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