(Payback period and NPV calculations) Plato Energy is an oil and gas exploration and development company located in Farmington, New Mexico. The company drils shallow wels in hopes of finding signicant oil and gas deposits. The frm is considering two different drilng opportunites that have very diferent production potentials. The frst is in the Barnett Shale region of central Texas and the oter the ulf Coast. The Bamett Shale project requires a much larger initial investment but provides cash flows of successful) over a much longer period of time than the Guf Coast opportunity. In addition, the longer life of the Barnett Shale project also results in additional expenditures in year 3 of the project to enhance production throughout the projects 10-year expected fe. This expenditure involves pumping ether water or CO2 down into the wells in order to increase the flow of oil and gas tomstrenre The expected cash flows for the two projects are as follows: a. What is the payback period for each of the two projects? b. Based on the payback periods, which of the two projects appears to be the best altermative? What are the limitations of the payback period ranking? That is, what does the payback period not consider that is important in determining the value creation potential of these two projects? e. "Plato's management uses a discount e of 21 5 percent to evaluate the present values ofts energy investment projets, what is tho NPV olte two proposed investments? d. What is your estimate of the value that wil be created for Plato by the acceptance of each of these two investments? a. Given the cash flow informaion in the table, the payback period of the Barnett Shale project is years. (Round to two decimal places