11. The NPV and payback period Suppose you are evaluating a project with the cash inflows shown in the following table. Your boss has asked you to calculate the project's net p value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. The project's annual cash flows are: Year 1 $375,000 Year 2 550,000 Year 3 600,000 Year 4 375,000 If the project's desired rate of return is 8.00%, the project's NPV-rounded to the nearest whole dollar-is Which of the following statements indicates a disadvantage of using the regular, or conven decisions? Check all that apply tional, payback period for capital budgeting The payback period does not take into account the time value of money effects of a project's cash flows. The payback period does not take into account the cash flows produced over a project's entire life The payback period is calculated using net income instead of cash flows