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

The regular 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 value does the discounted payback period method fail $to$ recognize due $to$ this theoretical deficiency?

$$3,759,579$

$$1,974,455$

$$1,577,761$

$$5,792,637$ Blue Hamster Manufacturing 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, Blue Hamster'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 $to$ the nearest two decimal places. $If$ your answer $is$ negative use a minus sign.$)$

The conventional payback period ignores the time value $of$ money, and this concems Blue Hamster's CFO. $He$ has now asked you $to$ compute Delta's

discounted payback period, assuming the company has $a10\%costof$ 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 $to$ the nearest two decimal places. For full

credit, complete the entire table. $(Note$: $If$ your answer $is$ negative use a minus sign.$)$