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Complete the following table and compute the project's conventional payback period. Round the payback period to the nearest two decimal places. Be sure to complete
Complete the following table and compute the project's conventional payback period. Round the payback period to the nearest two decimal places. Be sure to complete the entire table-even if the values exceed the point at which the cost of the project is recovered. Expected cash flow Year 0 $-4,500,000 -4,500,000 1.71 years Year 1 $1,800,000 -2,700,000 Year 2 $3,825,000 1,125,000 Year 3 $1,575,000 2,700,000 Cumulative cash flow Conventional payback period: The conventional payback period ignores the time value of money, and this concerns Blue Hamster's CFO. He has now asked you to compute Delta'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 the nearest two decimal places. Again, be sure to complete the entire table-even if the values exceed the point at which the cost of the project is recovered. Year 0 Year 2 Year 1 $1,800,000 Year 3 $1,575,000 Cash flow $-4,500,000 $3,825,000 Discounted cash flow Cumulative discounted cash flow Discounted payback period: years Which version of a project's payback period should the CFO use when evaluating Project Delta, given its theoretical superiority? The regular payback period The discounted payback period
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