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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
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 two decimal places. If your answer is negative, be sure to use a minus sign in your answer.) Expected cash flow Cumulative cash flow Conventional payback period: Year 0 Year 1 Year 2 Year 3 -$4,500,000 -$4,500,000 $1,800,000 -$2,700,000 $3,825,000 $1,125,000 $1,575,000 $2,700,000 1.71 years The conventional payback period ignores the time value of money, and this concerns Green Caterpillar's CFO. He has now asked you to compute Alpha's discounted payback period, assuming the company has a 9% cost of capital. Complete the following table and perform any necessary calculations. Round the discounted cash flow values to the nearest whole dollar, and the discounted payback period to two decimal places. For full credit, complete the entire table. (Note: If your answer is negative, be sure to use a minus sign in your answer.) Year 0 Cash flow -$4,500,000 Year 1 $1,800,000 Year 2 Year 3 Discounted cash flow -$4,500,000 Cumulative discounted cash flow -$4,500,000 $1,651,376 -$2,848,623 $3,825,000 $3,219,425 $1,575,000 $1,216,188 $370,802 $1,586,991 1.88 years Discounted payback period: Which version of a project's payback period should the CFO use when evaluating Project Alpha, given its theoretical superiority? The regular payback period The discounted payback period
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