3. Which one of the following is not a problem of using the payback period?

• Firm cutoffs are subjective.
• Does not consider time value of money.
• Does not consider any required rate of return.
• Consider all of the project's cash flows.
• None of the above are problems of using the payback period.

4. A firm is starting a new project that will cost $200,000. It is projected to last 5 years and to generate cash flows of $50,000, $70,000, $90,000, $50,000 and $30,000 from Years 1 through 5 respectively. If the discount rate is 10%, what is the payback period of this project? Round to the second decimal place. Type only numbers without any unit ($, %, etc.)