6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions Consider the case of Cuid Goos Metal Wirks Inc Cold Goose Metal works Ink 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, Cold Goose'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 eventy throughout uach year Complete the following table and compute the project's conventional payback period. For full credit, complets the entire table. (Note Rund the convectional payback period to two decimal places. If your answer is negative, be sure to use a minus sign in your answer Expected cash tow Cumulative cash flow Conventional payback period Year -$6,000,000 Year 1 $2,400,000 Year 2 $5,100,000 Year 3 $2,100,000 years Land this concerns Colt Goneh budgeting Complete the fullwing table and compute the project's conventional payback period For full ct, conplete the treat (Mate: Round the conventional paytack period to two decimal places. If your amer is negative, be sure t Expected cash flow Year B $0,000,000 Year 1 $2,400,000 Year 2 $5,100,000 Year 3 $2,100,000 Cumulative cash flow Conventional payback period years has now as you come Des cost of capital. Complete the following table and pertamanya and the daunad payback pead two o The conventional payback period ignores the time vahel of money, and this concerns Cad Goor's CFO discounted payback penod, auming the company Round the scounted cash flow valu the wire table. (Note: If your answer is negative, be sure Cash flow Year O $6,000,000 Year 1 $2,400,000 Year 2 15.100.000 Year 3 Cumulative counted cash flow Dounted payback which s fant's perback period should the CFO use when eating rod Dts gentl The regular ab One thanwal advantage of both bonsarial. Q sent these (hote: If your answer is negative, be sure to use a minus sign in your an Dihod to two decimal plac for cudit, compl Cash flow Year 0 $6,000,000 Year 1 $2,400,000 Year 2 $5,100,000 Year 3 $2,100,000 Discounted cash flow $ Cumulative discounted cash flow $ Discounted payback penod years Which version of a project's payback period should the CFO use when evaluating Pront Delta, given its theorical superint O the regular payback period O The discounted payback penod One theoretical disadvantage of both payback methods-compared to the net present value method-is that they fail to consider the flows beyond the point in time equal to the payback pend How much value in this example does the discounted back period method fail to recognise to this tal $3.957,217 $2,411,755 11,714,226 $6.168.764