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7. The payback period Aa Aa lps firms establish and identify a maximug acceptable payback period that helps in their capital budgeting decisions. Consider the

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7. The payback period Aa Aa lps firms establish and identify a maximug acceptable payback period that helps in their capital budgeting decisions. Consider the case of Blue Hamster Manufacturing Inc.: Blue Hamster Manufacturing Inc. is a small firm, and several of its manegers are wornied about how soon the firm will be able to recover its initial investment from Project Sigma's expected future cash flows. To answer this question, Blue Hamster's CFO has asked that you compute the project's payback perjod using the folloiwing expected net cesh flows and assuming that the cash flows are received evenly throughout each year Complete the following toble and compute the project's conventional pavbeck period For full credit, complete the entire table Year o Year 1 Year 2 Year 3 4,500,000$1,800,000$3,825,000 $1575,000 Expected cash flow Cumulative cosh flow Canventional paybock period ue of money ond this concerns Blae Hemister's Cho He has The conventional paybeck perioo gnores the time va asked you to compute Sigme's discounted Daybeck ae ad, assuning the comoany has a w coit of ciota Complete the foslowind table and peformey Year 2

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