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Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to

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Cold Goose Metal Works 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 Sigma'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 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 pavback period ignores the time value of monev, and this concerns Cold Goose's cFo. He has now asked you to compute Sigma? discounted parback perlod, assuming the company has a 104b cost of capital. Complete the following table and perform ary necesiary catculation: Found the discounted cash fiow values to the nearent whole dollac and the discounted pavback period to the neareat two decimal places For full credit complete the entre tabie. (Note: If rour answer is negative use a minus slgn.) Which version of a project's payback period should the CFO use when evaluating Project Sigma, oiven its theoretical superiority? The discounted payback period The reputar toritick period One theorstical disadvantage of both Davback methods-compared to the net present value method-is that they fail to consider the value of the cash flows bevond the point in tome equal to the payback period. The discounted payback period The regular payback period One theoretical disadvantage of both payback methods-compared to the net present value method-is that ther fall to consider the value of the cash flows beyond the point in time equal to the parback period. How much value does the discounted payback period method fall to recognize due to this thaoretical deficiency? $1,645,990 54,527,198 49,+92,943 51.21.4.801

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